Financial Consumer Agency of Canada Act

An Act to establish the Financial Consumer Agency of Canada and to amend certain Acts in relation to financial institutions

This bill was last introduced in the 37th Parliament, 1st Session, which ended in September 2002.

Sponsor

Paul Martin  Liberal

Status

This bill has received Royal Assent and is now law.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.

Motion in AmendmentFinancial System Review ActGovernment Orders

March 27th, 2012 / 12:25 p.m.
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Kenora Ontario

Conservative

Greg Rickford ConservativeParliamentary Secretary to the Minister of Aboriginal Affairs and Northern Development

Mr. Speaker, I want to take this opportunity to thank the constituents of the great Kenora riding for giving me the opportunity to speak on their behalf with respect to Bill S-5.

This is an obligatory and largely routine piece of legislation, but it is essential for the continued strength and security of Canada's financial system that our constituents rely on every day, be it to cash a cheque, to apply for a mortgage or to buy that first home.

As background for all Canadians, legislation governing federally regulated financial institutions is reviewed every five years by the government to ensure the stability of the Canadian financial system. The last legislative review was completed in 2007 through Bill C-37 in the 39th Parliament. In 2001, a similar review was completed with Bill C-8 in the 37th Parliament.

I should also let the House and our constituents know that it is crucial that today's act be passed by April 20, 2012. This is the legislated sunset date, and passage must be achieved by then to allow the Canadian financial system to function in the manner that it has been doing.

In September 2010, the present five-year review began. This was kicked-off with an open and public consultation process. The Minister of Finance invited all Canadians to give their views on how to improve the financial system. Throughout that consultation, many Canadians gave their ideas and suggestions on how to further reinforce and strengthen our financial system. Indeed, much of that comment is reflected within the financial system review act that we are debating today. To be sure, today's act takes into consideration the feedback from industry groups, consumer groups and other Canadians to make measured, technical adjustments to strengthen Canada's regulatory framework.

I would also draw the attention of Canadians to the fact that today's act has already been reviewed and approved by the Senate banking, trade and commerce committee as well as the House of Commons finance committee and the great work of those members. Both committees undertook a comprehensive and efficient review of this act. It included talking to organizations like the Financial Consumer Agency of Canada, the Credit Union Central of Canada, the Office of the Superintendent of Financial Institutions Canada, the Canadian Life and Health Insurance Association, the Canadian Bankers Association and the Canadian Payments Association. This was an impressive catchment of stakeholders.

I want to thank each of the witnesses who spoke on the financial system review act in front of both committees for providing their important input. I will note that witnesses, while acknowledging the act's technical nature, were very supportive of it overall. For example, the Canadian Life and Health Insurance Association declared, “Bill S-5 represents a welcome fine-tuning of the various financial institution statutes”.

At this time I will quickly review some of the initiatives taken in today's act.

Once more, even though the majority of these initiatives are largely technical, they are indispensable for the security of Canada's financial system. That is why today's act would make the following alterations: modernizing legislation to uphold financial stability and guarantee that Canada's financial institutions continue to operate in a competitive, efficient, effective and stable environment; improving the consumer protection framework, including expanding powers for the Financial Consumer Agency of Canada to better protect consumers; and reducing the red tape and regulatory burden on financial institutions.

Other measures contained in today's act include the following: clarifying that all Canadians, including bank customers, are able to cash government cheques under $1,500 free of charge at any bank in Canada; removing duplicative disclosure requirements for federally regulated insurance companies; offering adjustable policies in foreign jurisdictions, thus cutting their red tape burden; encouraging competition and innovation by allowing co-operative credit associations to provide technology services to a broader market; and improving the capacity of regulators to efficiently share information with international counterparts while respecting the privacy of clients.

There are more, but I want to emphasize that the significance of this act provides for a safe and secure financial system.

It is a system that has endured for Canadians during the recent global economic crisis that saw the failure of some of the best known banks around the world. Indeed, in recent years Canadians have recognized just how important a sound financial banking system really is for our country's economy.

Undeniably our system has been a model for countries around the globe. Canada proudly did not have to bail out, nationalize or buy equity stakes in its banks, in stark contrast to the U.S., the United Kingdom and countries in Europe. In fact the World Economic Forum has ranked Canada's financial system as the soundest in the world for four straight years. Our safe and secure financial system is envied the world over.

It was remarked in the well-known publication Forbes, “With no bailouts, it is the soundest system in the world, marked by steady and responsible continuation of lending and profits”.

Constantine Passaris, a University of New Brunswick economics professor, adds:

The financial tsunami of 2008 swept around the world with devastating economic consequences. Banks proved to be particularly vulnerable to the credit crunch that followed....

There is no denying that our Canadian banks proved significantly resilient....

The Canadian way is to record our national achievements in a low-key and understated manner. There is one economic achievement however, that has made the world stand up and notice. Indeed, in this case, we cannot hide from the international spotlight and we can proudly accept the global applause....

We appreciate these comments. Indeed, many of the financial sector solutions now promoted internationally are modelled on our Canadian system. With today's bill, Canada's financial system will remain secure and serve as a fundamental source of strength for Canada's economy moving forward.

The financial system is one of the most important aspects of Canada's economy and jobs, totalling approximately 7% of Canada's economy. What is more, it provides employment, good, well-paying jobs for more than 750,000 Canadians. Our financial sector also provides financing to the housing markets and other markets that rely on borrowing, and in that respect the financial services sector is a significant presence in the day-to-day lives of all Canadians.

The Financial System Review Act will help support a proven framework that benefits all Canadians who use or are impacted by the financial services sector.

The long established practice of regularly reviewing the financial institution regulatory framework is also a distinctive and positive practice that sets Canada apart from the world. Indeed, it has been vital to ensuring the stability of the sector. All Canadians would acknowledge the significance of frequently examining how we can better ensure our financial system's safety and soundness for the benefit of all Canadians. Today's bill accomplishes just that.

I encourage members to support today's bill and ensure it passes in a timely manner. I appreciate having the occasion to support this important piece of legislation.

Financial System Review ActGovernment Orders

February 14th, 2012 / 12:50 p.m.
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Conservative

Ray Boughen Conservative Palliser, SK

Mr. Speaker, I am pleased to have the chance to address the House in support of Bill S-5, the financial system review act. For the information of Canadians and members of the House, the financial system review act is a mandatory and routine piece of legislation.

To ensure the stability of the financial sector in Canada, the statutes that govern federally regulated financial institutions must be reviewed every five years, a long-standing practice that has carried over from previous governments. As I mentioned previously, it deals with federally regulated financial institutions and, for clarity, those include domestic and foreign banks, trust and loan companies, insurance companies and co-operative credit associations.

The last similar legislative review was completed through Bill C-37 in the 39th Parliament. Prior to that, a similar review was completed in 2001 through Bill C-8 in the 37th Parliament. As with the previous five year reviews, there is a timeline for the process to be completed, as the sunset date for the financial institutions statutes is April 20, 2012. The present five year review, which has led to today's bill, commenced in September 2010 when the finance minister launched an open and public consultation process that asked all Canadians to submit their thoughts and ideas on how we could best improve Canada's financial system to make it even more stable and secure.

During the consultation process, I understand that many Canadians provided their feedback and much of that is seen in today's bill. Moreover, the public consultation process itself has been praised. For example, the Canadian Life and Health Insurance Association told the Senate banking, trade and commerce committee during its study of the bill, “The consultation process was very positive and reflected the technical nature of this review”.

The financial system review act, while largely technical, would take important steps to help guarantee that Canada's fiscal system is securely regulated and remains strong and stable for the sake of our economy. Among the bill's highlights are measures to: First, bring up to date financial institutions' legislation to support financial stability and ensure that Canada's financial institutions continue to operate in a competitive, well-regulated and secure environment; second, better protected consumers with an improved protection framework, including reinforcing the powers of the Financial Consumer Agency of Canada; and third, improve effectiveness by reducing unnecessary administrative red tape on financial institutions and adding prudently regulated flexibility.

Again, today's bill is tremendously important in supporting the continued strength of our economy, the main priority of our Conservative government and an area where we are getting results. Indeed, while there are challenges ahead, Canada's performance during the recent global downturn has been strong when compared to other industrialized countries. First and foremost, since our government introduced the economic action plan to respond to the global recession, Canada has recovered more than all of the output and all of the jobs lost during the recession. Some 610,000 more Canadians are working today than when the recession ended, resulting in the strongest rate of employment growth by far among all G7 countries.

Furthermore, about 9 out of 10 positions that have been created since July 2009 have been full time and more than three-quarters of the jobs created over this period have been in the private sector. Fortunately, Canada has fared far better than the U.S. in this regard. Indeed, Canada's unemployment rate has been lower than that of the U.S. since October 2008, a phenomenon not seen in nearly three decades.

On top of Canada's solid performance on jobs, the real gross domestic product is now significantly above pre-recession levels, the best performance among the G7 nations. It is clear that Canada has weathered the economic storm relatively well. It is also clear that this resilient performance in a climate of global uncertainty has not gone unnoticed.

Both the International Monetary Fund and the Organisation for Economic Co-operation and Development forecast that we will be among the strongest economic growth in the G7 over this year and next. Forbes magazine has ranked Canada number one in its annual review of the best countries in which to do business. Three credit agencies, Moody's, Fitch, and Standard & Poor's, have reaffirmed their top ranking for Canada. Most significant, for the fourth year in a row, the World Economic Forum rated Canada's banking system as the soundest in the world. That is something we would reinforce with today's bill.

Clearly, this is a solid performance in volatile times and it will serve this country well. Indeed, in the recent words of Scotia Bank's chief economist, Warren Jestin, “When you look at what exists in Canada, this is still the best country in the world to be in.

To truly understand the strength behind this performance, we need to consider the hard work that took place through the actions that our Conservative government took to pay down debt, lower taxes, reduce red tape, promote free trade and innovation and ensure a stable financial system.

To start with, our government paid down significant amounts of debt when times were good and kept our debt to GDP ratio well below our G7 counterparts. As a result, when trouble hit, we had the ability to respond.

The International Monetary Fund projects that Canada's net debt to GDP ratio for the last year will come in at just under 35%. A net debt to GDP ratio of under 35% is excellent considering that these rates for other G7 nations are much higher. In contrast, Germany is projected to be over 57%, the United States and the United Kingdom at over 72%, France at 81%, Italy at 100% and Japan just over 130%.

Along with this strong fiscal performance, we introduced the tax relief required to create jobs and growth in all economic conditions. In 2007, prior to the impact of the financial crisis, Canada passed a bold low tax plan that helped to brand Canada as a low tax destination for business investment. This low tax plan, along with our sound and safe financial system, plays and will continue to play a crucial role in supporting economic growth and jobs.

Our Conservative government is under no illusions that our work is finished. Major challenges remain both here and around the world. As we know, the global economic outlook remains highly uncertain and the situation in Europe is still very fragile. The changes facing our global economy are far from over and Canada will not be immune.

Despite solid job creation since July 2009, too many Canadians remain unemployed. That is why our Conservative government's main focus will be the continued implementation of the next phase of Canada's economic action plan to support jobs and growth as we prepare for budget 2012. That includes today's bill, which would help to ensure the continued strength and security of our financial systems.

Once more, we will continue to focus on improving the well-being of Canadians by sustaining the economic recovery, eliminating the deficit and making investments that will fuel long-time growth. I strongly urge all members to support and vote in favour of this important legislation and help it progress in a timely manner to passage.

February 19th, 2007 / 3:50 p.m.
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Duff Conacher Chairperson, Canadian Community Reinvestment Coalition

Thank you very much to the committee for this opportunity to present on Bill C-37.

The Canadian Community Reinvestment Coalition, which I chair, is a coalition of a hundred anti-poverty, community economic development, consumer, labour, and citizen groups that represent, in total membership, more than 3 million Canadians. As a coalition, it has been advocating increased bank accountability and consumer protection for ten years now.

The coalition is concerned about key gaps in Bill C-37 that have been continued in federal financial institution laws for many years. Citizen groups and consumer groups have been pointing to these gaps for more than a decade, but the gaps have still not been closed. It's a serious situation, because according to 90% of Canadians, access to basic banking service is an essential service—as essential as heat, hydro, or other home services that essentially allow people to live in society.

At the same time, the market share controlled by the big banks in Canada in most main service categories in most parts of the country is higher than in most industrialized countries. As one former head of the Federal Trade Commission in the U.S. believes, the record profits of the banks are proof enough of excess market share controlled by too few players in the market.

At the same time, the watchdog agencies watching financial institutions in terms of accountability and consumer protection lack either independence, resources, or a strong enforcement attitude and record. As a result, financial consumers are essentially on their own and up against very powerful, well-resourced financial institutions when shopping for, dealing with, or complaining about financial institution services.

While the past twenty years of response from the federal government have largely seen inaction, there was somewhat of a breakthrough with Bill C-8 in 2001. However, the measures in Bill C-8 all contain key loopholes that undermine the effectiveness of the measures. As a result, in 2007, the 20 million Canadian financial consumers, especially of banking services, lack key protections. Equally, Canadian banks lack key accountability requirements that have been in place in the U.S. and other countries for ten to twenty years.

The first area--of ten--about which the Canadian Community Reinvestment Coalition is concerned is that of the public accountability statements that now have to be produced by federally regulated financial institutions annually. These public accountability statements pale in comparison to the accountability statements that are required—now for over twenty years—to be produced by banks and other institutions in the U.S.

The big problem is that, unlike in the U.S., the statements do not require the banks to disclose detailed data on their service, lending, and investment records--in particular, demand for lending and investment and the response by each bank, broken down on a neighbourhood basis and by characteristics of borrowers. As a result, it's impossible to tell what the lending, service, and investment record is of any bank in Canada.

At the same time, we are allowing the banks to grow, take over lots of institutions, and possibly merge in the future. With each takeover, as the banks get larger, we're not able to measure whether their service gets better or worse as they get bigger.

In the U.S., the essential rule is that if you're a bank with a bad record, you're not allowed to get bigger. It's just common sense. Why would you want a bank that has a bad service, lending, or investment record to get bigger? Then they're just going to serve more people poorly or continue to increase the discrimination in lending or other unfair lending practices.

As part of the accountability statements being strengthened so that they become more detailed, we also propose that the government would regularly review these statements and grade them, as is done in the U.S., and that growing as a financial institution would be conditional on having a good service, lending, and investment record. This is what has been done in the U.S. for more than twenty years.

A second accountability measure that we propose to be put in place is that government should not contract to financial institutions that have poor service, lending, or investment records. A mandatory condition for bidding on all federal government contracts should be that the institution can show it has had a good record every year for the previous ten years.

Right now the federal government hands out tens of millions of dollars of business to federal financial institutions and requests nothing in return. This is a leverage point, an incentive that can be used very effectively, as it has been used in other areas, to ensure that the banks have a good record and serve every Canadian fairly and well.

I'll turn now to a specific provision in Bill C-37, which is a loophole that was left by Bill C-8, and that is the policies that were required by the banks in terms of holds on cheques. Bill C-8 required only that the banks have a policy. The policy that they've put in place is that you get access to the money you deposit by cheque ten days after you deposit it.

For people with low incomes, that means they'll never open a bank account because they can't wait for their money for ten days. Bill C-37 reduces this cheque-hold period to only four to seven days, but 98% of cheques clear overnight. Our proposal is that this measure be amended so that depositors will have a right to access funds from a deposited cheque the day after the cheque is deposited.

To go through some of the other measures quickly, the Financial Consumer Agency of Canada is not allowed to name an institution that violates the law unless the institution is prosecuted by the agency. The agency has prosecuted only two institutions in the past five years. All of the rest that have violated the law remain unnamed, and as a result, Canadians have no idea which institutions have a good record or not. The agency needs to be required to penalize and name violators in every case that they find a violation.

As well, the Financial Services Ombudsman needs to be made much more independent and have binding powers. The federal government should not have let the industry set up its own ombudsman, but should have, as Bill C-8 set out, set up the ombudsman itself as a government-run body that would ensure independence and fairness in the operations, and given the body the power to order financial institutions to remedy unfair treatment.

Question No. 83Routine Proceedings

December 12th, 2001 / 3:20 p.m.
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Markham Ontario

Liberal

John McCallum LiberalParliamentary Secretary to the Minister of Finance

As required by Bill C-8, the four recently demutualized insurers have a common transition period during which they must remain widely held. No mergers by, or acquisitions of, demutualized firms are permitted during that period. The transition period ends on December 31, 2001.

After December 31, 2001, demutualized insurers with equity of under $5 billion will automatically be eligible to be closely held, however, transactions involving these companies will continue to require the approval of the Minister of Finance. As a matter of policy, those demutualized companies with over $5 billion in equity will continue to be widely held.

While companies are always free to hold commercial discussions with one another, the Minister will not consider any applications regarding mergers or acquisitions of these companies prior to January 1, 2002. More specifically, no applications will be considered under financial institutions statutes and no analysis of potential transactions will be undertaken before this date.

Canada National marine conservation areas ActGovernment Orders

November 20th, 2001 / 3:20 p.m.
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Bloc

Robert Lanctôt Bloc Châteauguay, QC

Mr. Speaker, normally I would not use the two minutes that I have left, because I had many opportunities to speak this morning. However, given the importance of Bill C-10, to which we are opposed, I will use those two minutes.

Before oral question period, I was saying that there is confusion within the government's own departments, whether it is Fisheries and Oceans, or Environment Canada. Now, in addition to these two, Canadian heritage wants to be responsible for certain areas, this strictly for Canadian unity reasons.

With this much confusion within the federal government itself, it is easy to imagine the confusion there would be at other levels of government. To whom would a provincial government such as Quebec go in connection with the administration of a protected zone? I have no idea.

This confusion gives rise to another problem as well. The problem is a fundamental one. If the departments of a government cannot work together, how can we expect provincial governments to co-operate? It is understandable that the Government of Quebec would refuse to co-operate in this project. The federal government is unable to tell us clearly and precisely why this bill comes from Canadian heritage, when Fisheries and Oceans Canada already has a marine area protection program. The Bloc Quebecois cannot but oppose such an incredible administrative muddle as this.

The way this bill is to be implemented is not clear; it cannot be clear, because of the very nature of its objectives. Canadian heritage is trying to take over jurisdictions that are not its own. It is also trying, with this bill, to take over areas that are not its areas, and thus to meddle once again in provincial jurisdictions and in Quebec's jurisdiction, under cover of the environment. How far will the federal government go in taking over jurisdictions that belong to Quebec and the other provinces?

I reiterate my opposition to Bill C-10 on protected marine areas for several reasons, including the overlap of the responsibilities of departments and especially because of the indirect approach taken in appropriating jurisdictions that belong exclusively to Quebec and the other provinces.

Once again, the federal government has chosen to introduce a bill that ignores action already taken, and successfully. I am talking of course about the agreement regarding the Saguenay—St. Lawrence marine park.

I fear for the future of people who believe in this government, which takes no account of their interests. I fear for the future of our environment when the objectives of a bill put before us ignore its primary focus, the environment.

In closing, I want people to understand what we are saying here. The Bloc Quebecois is in favour of protecting the environment, but we cannot be naive to the point of agreeing to pass this bill. The government tried to get the House to pass similar legislation in previous parliaments through Bill C-8 and Bill C-48. Now we have Bill C-10, which creates overlap and through which the government is trying to use crown lands.

Canada National Marine Conservation Areas ActGovernment Orders

November 20th, 2001 / 1:10 p.m.
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Bloc

Antoine Dubé Bloc Lévis-Et-Chutes-De-La-Chaudière, QC

Madam Speaker, I am pleased to speak to Bill C-10.

Bill C-10 is a rehash of two predecessors, identified at the time as Bills C-8 and C-48. This raises the following question: why did the government not pass C-8? Why did the Liberals, in their third mandate, not pass C-48?

There are a number of reasons why. In the latter case, it is because the Prime Minister decided to call a hasty election in order to catch his adversaries by surprise, particularly the new leader of the Canadian Alliance. He put vote-getting ahead of a number of bills, and this one, along with 22 others fell by the wayside. I remember, because one of those was a private member's bill on shipbuilding.

Now we are only a few weeks away from the anniversary of that election call, at which time that bill on shipbuilding had gone through all the stages, second reading, clause by clause examination in committee and report stage. All that remained was third reading, but the Prime Minister preferred to call an election. I know that my bill was not the only reason; it was primarily to gain political advantage, one might say.

There is another question. If the government had not yet passed this bill on marine conservation areas, it is certainly not because it was a priority. If it was not a priority during the two previous mandates, is it really a priority now? I doubt it. I would tend to believe that the government does not have much to offer to the House in terms of a legislative agenda while the anti-terrorism legislation is still in the planning and consultation stages. In the meantime, it gives us this bill to discuss.

As I recall, when we were dealing with Bill C-8 and Bill C-48, on each occasion I took part in the debate and spoke against those bills for the very same reasons.

We in the Bloc Quebecois often bring up the fact that there is duplication between the federal and provincial governments. This is another case in point. Under the Constitution, natural resources and public lands come under provincial jurisdiction. It is a proven fact.

Nevertheless and in spite of warnings, in spite of the opposition, and in spite of the result of botched consultations, we have this bill before us. If an independent firm were asked to report on the kind of consultations that were carried out on the bill, it would not be very likely that the same company would be hired again. The data is not conclusive.

Moreover, this duplication is, I do not know how to say this, “intrafederal”. We are talking about creating marine conservation areas which would come under the Department of Canadian Heritage, but we already have marine protection areas under the responsibility of the Department of Fisheries and Oceans. We also have marine wildlife areas under the responsibility of the Department of the Environment.

It bears repeating: marine conservation areas, marine protection areas, and marine wildlife areas.

This, as my father would say, is a lot of hogwash. It is incomprehensible. By trying too hard to protect natural resources, the government may actually harm them, and I wonder about their motives. Apparently conservation is what they have in mind, but conservation in terms of heritage. I suppose that fish could be admired for their beauty or like any other typically Canadian item.

But these things are related and, during the consultations, people said “Yes, but there is a very distinct possibility when there is a desire to protect natural species for heritage reasons in the same areas as fisheries and ocean's marine protection areas”. But fisheries and oceans officials want there to be more fish and fisheries products to feed us, as well as provide work for people in regions such as the Gaspé or the maritimes. The Department of the Environment is also concerned because all this is very closely related.

And precisely because it is closely related, should these three kinds of areas not come under the jurisdiction of one federal body? Imagine the situation for people in Quebec or in other provinces trying to manage projects or areas under the authority of one or the other of these three departments. The federal government is in the process of inventing a weapon by which it can attack provincial jurisdictions from three different angles. One would think we were in Afghanistan, so intense is the bombardment. This will not do. It is intrafederal duplication.

The member for Chicoutimi—Le Fjord is laughing, but I know that he agrees with me. He too thinks it is ridiculous. But now, he can no longer say so because he is sitting with the Liberal majority. He is obviously forced to toe the party line. But when he was on this side of the House, he was in favour. Then, he was right to support the creation of the Saguenay-St. Lawrence marine park.

Why was that a good project? Because there was an agreement between Quebec and the federal government intended not just to protect but to develop this beauty, which the member for Chicoutimi—Le Fjord could still develop.

I could give another example of co-operation that took place, but that is not moving as quickly as we would hope. I am referring to the St. Lawrence action plan, which concerns primarily the shores of the river. Many projects are waiting for funding and money. I saw the tremendous work done by priority intervention zones. The zone in my region is called the Zone d'interventions protégées de Chaudière-Appalaches. Several projects are waiting for money to develop and protect the environment, and to help the ecosystem.

But instead of that, what we have before us is a virtual bill, since it does not target a specific territory. This is an omnibus bill that would allow the government to get involved in jurisdictions that, again, belong to the provinces, this within a framework that does not include public lands alone, but also natural resources that belong to the provinces. This is being done after a rushed consultation process.

When we want a copy of the supposedly 300 pages on the outcome of these consultations, we are given 73. It is as if the protection of these areas were a military secret. It is almost forbidden to say where these areas will be located, as if this were a highly strategic piece of information. If this were a priority, the government would have included it the first time, in Bill C-8, and the second time, in Bill C-48. But it did not do so.

Now that things are quiet and that the government is not ready to go ahead with Bill C-36 because consultations are still going on, it is making us debate this issue in parliament.

I say that it is too bad for the Liberal government. Every time, we tell the government the same thing and say “You are getting involved in provincial jurisdictions. Instead of doing that, put money in your own jurisdictions, in national parks”.

Instead, a report from the auditor general talks about negligence and insufficient staff and funds, before adding that it is an ill-protected area. And the government wants to develop more areas. This just does not make sense.

Canada National Marine Conservation Areas ActGovernment Orders

November 20th, 2001 / 1 p.m.
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Canadian Alliance

Deborah Grey Canadian Alliance Edmonton North, AB

Not on a motorbike, that is true. We want to be able to celebrate marine areas whether they are oceans, lakes or whatever. We have a marvellous heritage and beautiful waterways. We need to celebrate them and make sure that their safety and sanctity remain in place.

The bill would allow for the creation of future marine parks or the enlargement of existing parks by order of governor in council. Members will know that governor in council is a tremendously powerful tool. It can be used for good but it is also an amazing temptation to use for power because one does not need to mess around with all the to-do of having to go through parliament.

It is important to make sure that the House knows, accepts and endorses any changes that would take place regardless of what kind of legislation it is. We are currently working through the anti-terrorism bill after the events of September 11. We know how important it is that parliament be allowed and enabled to speak on it.

We have reservations about governor in council because we must make sure that it does not run roughshod over the democratic process.

A proposed amendment would be tabled in each House and referred to committee which would have the option of reporting back to the House. In order to defeat the proposed amendment the committee would have to report to the House that it disapproved of the amendment. If no such motion were proposed in either House after 21 sitting days the amendment could be made, thereby creating or enlarging an MCA.

It is important to bring things before the House. We are not here for the fun of it. It is not that we all love to debate although I am sure that is a characteristic most of us share. Nonetheless things should not be hived off through a backroom process and people should not whip things through. These things need to see the light of day. Canadians must be ensured that they know exactly what is going on.

The marine conservation areas could include seabeds, including the waters above them and species that occur within them, as well as wetlands, estuaries, islands and other coastal lands.

I am not a serious scuba diver. My husband and I have taken it up in the last few years and we enjoy it. How special it is to be able to appreciate not just what God has created overland and on the ocean but underneath as well. We saw some magnificent things while scuba diving in Mexico and St. Thomas in the U.S. Virgin Islands. They were unbelievable experiences we were allowed to share and we are very grateful for them.

We are concerned about the environment and about the ecosystem under the ocean. It is essential to make sure we protect them. When I look at the bill I want to make sure that it is safe and environmentally sound for creatures under the sea, for people who will be scuba diving, and for people who will be participating on the water or underneath it.

The concern I raised related to flight and boating patterns for people flying over or boating across conservation areas. We need to ensure that the legislation takes into consideration the concerns of commercial ventures and not simply environmental issues.

There have been some technical and minor substantive changes when I compare the bill to Bill C-8. Some of my concerns and reservations have also been addressed.

Bill C-10 includes the following changes from Bill C-8 which was introduced in the second session of the 36th parliament. There is a stipulation in subclause 2(2) that nothing in the legislation would abrogate or derogate from existing aboriginal rights. Those are things that are essential as well. We want to make sure that the aboriginal communities are consulted and not just having things announced to them. We want to ensure that the ecosystem is very balanced and in place.

There is an explicit requirement in subparagraph 5(2)(b) for provincial consent in the establishment or enlargement of a national marine conservation area. That is important because the provincial governments are the level of government that is closer to the people. Then one has municipal governments which are the closest level to the people, period.

I was at the Alberta urban municipalities association government luncheon in Edmonton on Friday talking to town councillors. All members can be assured that if a sewer backs up or if a dog is barking people do not phone their member of parliament. They phone their town councillor or their county reeve, the level of government which is most closely associated with the people.

The provincial government is just one level closer. It is essential for provincial governments to be able to buy into that. That is very wise. If a federal government ever goes over the head of a provincial government it runs the risk of ostracizing people and pushing people aside. No one stands to gain anything from that.

There is an allowance in subclause 4(4) for zones for sustainable use and for high protection of special features and fragile ecosystems within these marine conservation areas. That is good as we need to have sustainable environmental controls on it.

I will comment on the whole idea of economic development. These are essential things to a commercial airline such as Harbour Air on the west coast of British Columbia. It has been flying over these areas for years. We do not want any government going to an extreme and specifying that there can no longer be commercial flights.

We need sustainable use, economical development and environmental impact studies. All these things have to go together and they should complement each other not be at odds with each other.

There is a requirement in clause 7 for an interim management plan when government tables in parliament a proposal for the establishment of a marine conservation area. We must acknowledge how important this place is to the debate and implementation of those things and how important it is that government be wide open with its intentions.

People across Canada would then feel safer, more special and consulted. They would certainly buy into with a sense of ownership and pride any matter regarding a national marine conservation area. It is not that people are against it. They are nervous about what the government will do. They have had many experiences where an order in council was brought through and a regulation happened.

It is not as if they were asked if this was all right. They were not consulted to work something through together with government. Rather there was some great pronouncement from on high that this would be the way it was. Some claim they are from the government and are there to help them. That makes people more nervous than confident.

I am pleased to see that the government made some changes. I am looking forward to making sure that the bill is not only sustainable but that it celebrates our unbelievable commitment not just to yap about it but to look after our environment, national parks and national marine conservation areas.

Canada National Marine Conservation Areas ActGovernment Orders

November 20th, 2001 / 1 p.m.
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Canadian Alliance

Deborah Grey Canadian Alliance Edmonton North, AB

Madam Speaker, I rise to address the bill again. It has been in the House for quite some time, as we know.

This is Bill C-10 in its latest incarnation. Members will recall that it was Bill C-8 in a previous session. I had serious concerns with Bill C-8 and obviously concerns about this one as well. It looks like the government had some second thoughts about the bill. I am pleased to say that the government is moving in the right direction.

The bill would create four marine conservation areas representing five of the twenty-nine marine regions. I had several people in my office last year who were explaining and showing me maps of the marine regions. I know that we have national parks in the country.

I live in Alberta and we celebrate our national parks there. There is nothing more beautiful than riding a Honda GoldWing across Banff, Yoho and Jasper national parks. It is a tremendous experience. My husband Lew and I were able to do that this summer and we really enjoyed it.

If we are able to celebrate that in terms of national parks on land, we want to be able to celebrate the sea and marine heritage as well.

Canada National Marine Conservation Areas ActGovernment Orders

November 19th, 2001 / 6:25 p.m.
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Bloc

Jocelyne Girard-Bujold Bloc Jonquière, QC

Madam Speaker, I am pleased to rise today on the issue of Bill C-10, an act respecting the national marine conservation areas of Canada.

Before I begin, I wish to congratulate my colleague, the member for Québec, who has spent a lot of energy trying to make the government understand the importance of consultation about this bill. I congratulate her and I say “Well done and continue your efforts. Sooner or later, our position may prevail.” I believe that is a positive way to work and improve bills.

Again, it is unfortunate. Members will recall that I was, for three years, the Bloc Quebecois' environment critic. A similar bill had been introduced during a previous parliament, but it died on the order paper.

During all that time, I thought that the government would have the decency to take into consideration the work done by the committee, in order to see what suggestions we might make regarding a new bill, and thus ensure progress across Canada.

We must admit, however, that this government has not listened to members of parliament, not even its own members. We had very good discussions at the time. We truly were, as is usually said, for the environment, and I believe it is important to be. We were all acting in good faith.

Yet, when I saw the new bill, I said to myself “They have changed nothing. They have changed absolutely nothing from the previous two bills, either Bill C-8 or Bill C-44”. In other words, they have learned nothing.

Consequently, I wish to say to Quebecers and Canadians that this bill, introduced by this government, does not contribute, as my colleague from the New Democratic Party said, to creating harmony favourable to the environmental agenda, namely marine conservation areas. The Liberals are not acting at all, but they are trying, through fine words, to interfere in jurisdictions that do not belong to them.

We must remember that, under the Constitutional Act of 1867, the seabed comes under provincial jurisdiction. That cannot be denied, it is in the Canadian Constitution. With this bill, however, the government wants to take over areas where it should act in harmony with the provinces and talk with them as it did in the case of the agreement it signed with the Quebec government concerning the Saguenay—Saint-Lawrence Marine Park. That was a model to follow.

It is too bad. I was rereading this agreement the other day and I wished the Liberal member had it in his hands. This agreement was made years ago. It has evolved and has now reached phase three. Each government put money in a concerted fashion to advance an issue.

Madam Speaker, I do not know if you have been to my neck of the woods to visit this marine park. I invite you to do so because it is an example to follow. I have always cheered at the fact that we had finally an example of co-operation, of mutual respect, in order to promote very important issues for present and future generations. Instead of taking this agreement as a model, the government is now trying to reinvent the wheel.

This semblance of willingness to do things for the advancement of a society saddens me. As my colleague was saying, I think they are deceiving the population and are deceiving each other. With this bill, not only are they invading areas that are not under their jurisdiction, they are not agreeing with each other.

All the departments concerned with this bill, Fisheries and Oceans Canada, Environment Canada, Parks Canada, have specific jurisdiction and their areas of responsibility clash.

I do not know whether members have read the Auditor General of Canada's report. I read it with interest myself. Nothing has changed, so the 1996 report still applies. The Auditor General of Canada published chapter 31 on the management of national parks by Parks Canada. I would like to highlight what he said in this chapter. It is very important, because Canadian Heritage is the department introducing this bill.

He said:

—in the six national parks we reviewed, Parks Canada's biophysical information was out-of-date or incomplete except for La Mauricie.

This is the auditor general. He also said:

—that, on average, the management plans for the 18 national parks were 12 years old, when they should have been reviewed every five years.

He added that:

The park management plans provide the strategic direction chosen for the protection of park ecosystems.

The auditor general also added:

Delays in preparing management plans and ecosystem conservation plans reduce Parks Canada's ability to preserve the ecological integrity of national parks.

I could go on reading quotes by the Auditor General of Canada about Parks Canada all night. I will quote another passage from his report:

We are concerned that Parks Canada's ability to preserve ecological integrity in national parks and ensure sustainable park use will be seriously challenged.

This was the auditor general's conclusion.

There is another reason, which Quebecers and Canadians should know about, with regard to why we in the opposition are opposed to this bill, and that is that there was no consultation. The minister said they sent 3,000 consultation documents to groups in Canada. That is quite something. I was really happy when I heard that.

Sixty-two people replied. Most of them did not comment on the bill; they gave their address so that they could be reached in future. That being the case, on what grounds can the Canadian government say that there was consultation? They will have to try again. Is this consultation?

Nowadays, there is great interest in the environment and ecology. I think that, right now, there are several groups in society interested in really being consulted on issues that will affect future generations. But if this is the kind of consultation they do, I can only say that it falls far short.

When young children fail in school, what do they do? They open up their notebooks again, they open up their textbooks and they start studying again. The Government of Canada should have said, "You are right, we failed. We are going to do our homework over again. We are going to look into why our consultations did not provide us with the results we were looking for. The answer we put down was incomplete for such an important question". But the government did not do this. They continued. They moved forward and said that they consulted.

What is important to say about this bill is that it has nothing to do with partnerships, nothing at all; it does not involve governments; it does not consult with the population as a whole.

Back home, people use the Saguenay—St. Lawrence Marine Park. People go to see it. This opportunity to create a park came from the grassroots.

I would like everyone to come and see it. We are talking about extraordinary spaces. It is a wondrous area. It is like being in another world. There are valleys and mountains that connect with the St. Lawrence; it is incredibly beautiful. We have no reason to envy other countries given what we have.

This came from the needs of the grassroots. People got together and called on governments and the governments sat down with them, which led to a phenomenal success.

Why not do the same thing with this bill? If the government wanted to draft another bill, why did it not use this model? This was a success. I am sure that for the 28 marine conservation areas that the government wants to create, there would surely be 28 local groups that would have sat down with them to keep their identity. That is important. We managed to maintain the identity of our beautiful little piece of country in Quebec. That is what we managed to do. But this bill works against any real consultation.

Today, November 19, is my colleague's birthday, the member for Châteauguay I wanted to take this opportunity to wish him happy birthday.

Today, we realize that what this government is doing is inappropriate. Sometimes, I ask myself if it is there to fulfill its election promises, to bring about progress in society or simply to reintroduce old bills and to ease its conscience.

It is not true that we should ease our conscience on environmental issues, particularly it they concern marine conservation areas. I do not go into the forest, I am not a fanatic, but I have an only daughter, and it is important to her. Madam Speaker, I am sure it is important for your children to preserve our natural sites, to develop them in their natural environment that evolved during many generations.

That is not what this bill is doing. I have seen and heard so many things. My colleague, the member for Québec, told me what happened in committee. What did the people who appeared before the committee say? That it is impossible that three departments can say that they have the same job to do.

Heritage Canada wants to look after marine areas. Environment Canada is also in charge of ecosystems, and DFO is involved in this as well. The fishing industry is now in a state of great turmoil in Canada. DFO and HRDC have a project that creates an uproar over the nationalization issue, a project that is ill adapted to the real needs of the industry.

With all this going on in the fishing industry, they would like to do the same for conservation areas. The government will have to do its homework, as the Canadian Alliance member is asking in his amendment, which provides that the government should withdraw this bill, and send it to committee so that it can do its homework. I do not agree with this amendment because I support their position, but because the government should do its homework.

Ministers keep talking about September 11. Every time they are asked a question in the House, they talk about September 11 and say that everything has changed since then. It is true everything has changed. So maybe this bill should be approached differently, in a different light.

Let us have discussions to come to an agreement so that all members end up saying more or less the same thing. The Canadian Alliance is defending a certain position. The Bloc Quebecois cares about the environment and wants to protect the exclusive provincial jurisdiction over submerged lands. The New Democratic Party agrees with our views to a large extent. That is our position.

So, how is it that all of a sudden the truth is in the hands of the Liberal members? I do not think anyone knows the truth after what we experienced on September 11. No one knows the truth anymore. I think we have work to do in the communal sense, for the people and we must make it known to this government, not because we do not want marine areas.

It is not that I do not agree, because we succeeded in Quebec, in partnership with the federal government. The agreement is there. I will get you a copy, Madam Speaker, because it is important. You are a member of the Liberal government. I am sure you wonder about this bill. I think many of your colleagues do so as well. I think we should base ourselves on texts people spent years drafting to ensure we reach a positive conclusion.

I never dismiss out of hand an initiative from the community. That community had an idea and, over the years, was able to get the attention of both levels of government. The governments said “Your idea makes sense. We must sit down together to put that plan into action”. That is what they did, and I congratulate them for having succeeded in doing that.

But why then is the government doing the opposite with this bill? I think we have not seen the last of this government's tricks. One day it says yes, the next day it says no. It is too important. There is a lot of money involved in environmental issues.

That is why the Bloc Quebecois is totally against this bill and is asking the government to go back to square one. It has plenty of time to do so; this is not an urgent matter. It will have to resume consultations. It will have to speak to stakeholders and to come to an agreement with the provinces. It has a lot of work to do.

At this time, it is impossible to make any progress. There is simply too much division. I think we should be able to talk and to agree. If the government does what it can to achieve that, I will be the first one to congratulate it.

But congratulations are certainly not in order today. On the contrary, I am accusing the government of being a source of confrontation, of interfering and of not doing what should be done to protect our environment.

Canada National Marine Conservation Areas ActGovernment Orders

November 8th, 2001 / 4:15 p.m.
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Bloc

Pauline Picard Bloc Drummond, QC

Mr. Speaker, it is nice to see that the government has decided to follow up on parliamentary issues that began during the 36th parliament.

National marine conservation areas have already been the object of two bills, namely Bill C-8 and Bill C-48.

Bill C-8 was introduced by Heritage Canada to provide a legal framework for the establishment of 28 marine conservation areas, representative of each of the Canadian ecosystems.

As always, the Bloc Quebecois supports the establishment of environmental protection measures. We supported the government when it introduced its legislation to create the Saguenay—St. Lawrence marine park.

I should point out that the Quebec government is currently taking measures to protect the environment and, more specifically, the seabed.

The Quebec government is also open to joint management, as demonstrated by phase III of the St. Lawrence action plan.

Having said that, we cannot support Bill C-10 for three reasons.

First, contrary to what was done in the case of the Saguenay—St. Lawrence marine park, the federal government wants to act alone by giving itself the right to establish marine conservation areas without any regard for Quebec's jurisdiction over its territory and environment.

Second, the creation of a new structure proposed by Canadian Heritage will duplicate Fisheries and Oceans Canada's marine protected areas and Environment Canada's protected areas.

Third, although it is unable to protect the ecosystems in existing national parks, Canadian Heritage wants to create marine conservation areas.

The bill is consistent with the course set by a federal government, which is increasingly intruding on areas of provincial jurisdiction. Not only is it intruding, but now it is proposing duplication. In fact it would like to duplicate its own responsibilities.

Is it necessary to stress the fact that the bill before us does not respect the integrity of Quebec's territory? One of the main conditions to establish a marine conservation area is for the federal government to be the owner of the territory where it is to be established. The Constitution Act, 1867, states that the sale and management of public lands are an area of exclusive provincial jurisdiction.

Quebec legislation on public lands applies to all public lands in Quebec, including the beds of waterways and lakes and the bed of the St. Lawrence River, estuary and gulf, which belong to Quebec by sovereign right.

In addition, the legislation would provide that Quebec could authorize the federal government to use its lands in connection with matters under federal jurisdiction but only by order in council.

I would add that habitat and wildlife protection is an area of shared jurisdiction and that the Quebec government is planning to establish a framework for the protection of marine areas in the near future.

It would be in the best interests of the federal government to work with the provinces instead of challenging them.

We already have several examples of co-operation such as the protection of the ecosystems in the Saguenay—St. Lawrence marine park and in the St. Lawrence River. All federal and Quebec departments have endorsed the St. Lawrence action plan, phase III.

Can the government explain clearly why it wants clear title to submerged lands to establish marine conservation areas?

Can it give us assurances and commit to respecting Quebec's land claims? Or is it going to ignore them as usual and establish marine areas wherever it sees fit?

It is our opinion that the mirror legislation which established the Saguenay—St. Lawrence marine park must serve as the model. It provides that both levels of governments, in Quebec City and Ottawa, continue to exercise their respective jurisdictions. There was no transfer of lands. The co-ordinating committee, which was struck to recommend to the minister responsible measures to reach the management plan objectives, encourages the involvement of local communities and is part of a Canada-Quebec co-operation framework.

There are other examples of co-operation. The environment is a shared jurisdiction under the Constitution Act 1867, and Quebec's jurisdiction is also recognized in the British North America Act, 1867.

By rejecting the concept of co-operation and by imposing title to the territory as an essential condition for the creation of marine conservation areas, the federal government is disregarding Quebec's jurisdiction over the environment, a further intrusion into areas of provincial jurisdiction.

I would like to illustrate just how complex the situation is in Canada when it comes to bodies of water. I will give an example that I have already given in a prior parliament but I believe it demonstrates just how complex the issues of jurisdiction are in relation to bodies of water, and the duplication between the federal and provincial governments.

Take the example of a fisherman who wants to go fishing on the St. Lawrence River. So far, so good. This fisherman has to ask the provincial government for a fishing licence.

He fishes on a boat he purchased in Quebec but on which he obviously paid a federal tax and a provincial tax. In order to launch his boat he must register it with the federal government.

Up to this point, everything is fine but before launching his boat he gets ready on the shore. He is on a territory under Quebec jurisdiction since the shores come under provincial jurisdiction.

However, the moment he launches his boat he changes jurisdiction because his boat is now on water, which comes under federal jurisdiction.

However, for clarity I must say that the bottom of the river is still under provincial jurisdiction. The fish that swims in the water and that the fisherman will try to catch is, unknowingly, under federal jurisdiction. But its friend, the crab, which is crawling on the bottom of the river, is under shared jurisdiction, even though the bottom of the river is still under provincial jurisdiction.

Once it is harvested, the fish that swims in federal waters will end up at the bottom of a boat. Then it falls under provincial jurisdiction. One must pay very close attention to the regulations, since there are federal quotas for those fish.

If we are talking about commercial fishing, there are federal and provincial laws and regulations regarding food, the environment, safety, equipment and so on. Do members understand? It is very complicated, is it not?

It is even hard for us to find our way through all this, so members can imagine how lost the average citizen who is not familiar with all these jurisdictions feels when he is told to get a licence.

Canada National Marine Conservation Areas ActGovernment Orders

November 8th, 2001 / 11:20 a.m.
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Canadian Alliance

Andy Burton Canadian Alliance Skeena, BC

Mr. Speaker, I am pleased to speak to Bill C-10, an act respecting the national marine conservation areas of Canada, at third reading debate on behalf of my riding of Skeena and my party.

I have much to say about this very ominous bill. My comments reflect not only my observations about the bill but those of the witnesses that came before the Standing Committee on Canadian Heritage both last month and in late May of this year. My comments will echo the concerns outlined by numerous municipal and chamber of commerce representatives who wrote to the committee but were not afforded the opportunity to present their concerns as witnesses.

It was the government's wish to get the bill out of committee and through the parliamentary process as quickly as possible thereby eliminating debate and discussion. I will endeavour to explain why the government might have wanted to rush the bill through. I hope that the Senate and its committee will take more time to review the bill and consult widely with coastal Canadians before they decide the its fate.

I suggest that members in the other place take the time to travel with their committee to those coastal communities. That suggestion was made numerous times in the House of Commons heritage committee by the communities themselves but it was ignored.

I will speak to the lack of consultation on Bill C-10 by the heritage department and the lack of understanding of the effects of the bill on coastal communities. I am surprised Liberal members representing coastal communities and ridings are not as offended by the legislation as I am. They should take a long look at the impact the bill could have on the economies of their ridings and stand with me in opposition to the bill.

It is worth noting that many times during the clause by clause review of the bill in committee the opposition and a Liberal member or two were united in opposition to a clause or supported an amendment I was making. Unfortunately when it came time to vote the parliamentary secretary called the shots and all the good Liberals fell in line.

They gave the appearance of listening to the arguments of the opposition on issues like guaranteed consultation, jurisdictional concerns and provincial or coastal community vetoes. The record will show that in the end they voted against amendments which would have made the bill far more palatable to coastal communities. Government members were not interested in making Bill C-10 palatable. They were simply tired of the bill dying on the order paper.

Commitments were made that the bill would go through. The government believed that come hell or high water Bill C-10 would see the light of day in this parliament. It is my hope that it will not without serious amendment, and I will speak to that in the body of my speech.

I take exception to claims by government members that we on this side of the House do not care about the environment or parks so why we even consider supporting the bill. This is a totally false assumption on their part.

The Canadian Alliance has a good track record of concern for the environment. We do not, as opposed to the Liberal record, pander to one group over another. We seek a balance in legislation that speaks to the concerns of environmentalists and addresses the realities of industrial and socioeconomic problems.

I consider myself to be an environmentalist. Environmental groups in downtown Vancouver and Toronto may not subscribe to my definition of an environmentalist but that does not make their way any better than mine. I will explain.

I have lived in northern B.C. all my life. When one lives in northwestern B.C., surrounded by coastal mountains, the Pacific Ocean, the Grand Skeena and Nass rivers and blue glaciers, one cannot but have a healthy respect for mother nature in all its glory. Anyone I know that lives in the north respects the environment, not only for its beauty but for what it has given the communities that exist as a result of its riches.

Most northern communities in my riding of Skeena were founded on industries that harvested the renewable or non-renewable resources of nature. Thriving communities erupted as a result of a need for workers because industries took the risk and situated themselves in northern B.C., and the cycle continued.

It is because of one sided legislation like Bill C-10 and poor provincial management by the previous provincial NDP government of B.C. that natural resource industries fled northern B.C. As a result many people in those northern resource based communities had to pack up and leave as well. They had to go where the work was. Unfortunately that has been a reality of much of northern B.C.

I consider myself an environmentalist, not only because of where I am from and my respect for the environment, but because I hunt, fish and camp in that environment. It is in my best interest that I treat it with respect and ensure its strength for future generations to come.

I am not opposed to the creation of marine conservation areas. I am opposed to legislation such as Bill C-10. It was introduced and passed by the federal Liberal government without concern for the effect that it would have on coastal communities and without any real consultation with the people and industries that the bill would seriously affect.

How could bureaucrats in Ottawa really understand what a piece of legislation like Bill C-10 would do to the economies of coastal communities? The reality is that they cannot because Ottawa is too far removed from the issue of life on the coast.

The official opposition would likely have been in favour of the bill had the government taken the time to travel to B.C., Atlantic Canada and northern Canada. It should talked to coastal communities about Bill C-10 before it introduced the bill as opposed to drafting it with only the environmental lobby on hand. We are opposed to the bill because of the Liberal government practice of secrecy at all costs and input at a minimum.

We should not for a second believe what the government says about the environmental record and concerns of the Canadian Alliance. It is just not correct. We are strong on the environment but also strong on balance, and the bill is not balanced.

We have major concerns over the lack of consultation. I will give members of the House some background on the lack of consultation on Bill C-10 prior to it coming back to the House at third reading.

The parliamentary secretary and members of the government will say that in its previous incarnations as Bill C-48 in the first session of the 36th parliament and as Bill C-8 in the second session of the same parliament the subject matter was consulted on widely. Let me clarify that claim by explaining that the government circulated Bill C-48, the predecessor to Bill C-10, to about 700 stakeholders across Canada.

Only a few were ever heard in committee, some of whom came from my riding of Skeena. Many expressed their concerns over the bill's obvious duplication of efforts with the recently created Oceans Act by the Department of Fisheries and Oceans.

We are told that departmental officials listened to the concerns of those stakeholders and amended the bill accordingly, reflecting their concerns in the new Bill C-10. Not only do I disagree with this claim, because Bill C-10 does not reflect the changes the witnesses asked for, but I find it disturbing that the supposed new and improved bill was never sent back to the original 700 stakeholders to see if the changes met with their approval.

If the government amended a piece of legislation based on comments from the stakeholders from which it had requested comments, it would seem logical that it would take the time to show off how well it listened and acted on their concerns. In this case it did not.

The point could be made by the government that it did not see the point in mailing the new and supposedly improved bill to the 700 stakeholders because it was not new or improved. If the government had done a proper consultation on Bill C-10, it would have found out early on, like its predecessors, that it too was not satisfactory to the identified stakeholders.

I guess the minister did not feel it necessary to tip off opponents to the bill that nothing had changed. She was prepared to push through unwanted, inaccurate legislation that as currently written would have an adverse effect on the economies of most coastal communities in northern British Columbia, particularly in my riding of Skeena.

Many of my constituents and I believe the committee consultation process was equally disappointing. The consultation process prior to the drafting and introduction of Bill C-10 was a farce. I will elaborate.

Bill C-10 was introduced in the House in February and sent to committee shortly thereafter. Initially the Standing Committee on Canadian Heritage had every intention to do precious little in the way of consultation and planned to send the bill back to the House for report stage and third reading prior to the House rising for the summer recess. This did not happen as planned and I will explain why.

As a member of parliament representing a coastal riding, representatives of coastal municipalities and various chambers of commerce came to me asking for an opportunity to be heard by the committee dealing with Bill C-10. I immediately expressed this concern to the committee, which had at that point in early May decided to limit the number of witnesses and close off debate. I had to fight hard with the committee members to allow my witnesses to be heard. They used every trick in the book and blamed me, if members can imagine, for my constituents not being heard.

Because I pointed out rather publicly that the committee had only heard from witnesses representing either environmental groups, industries or communities from eastern Canada and had ignored the west coast, the committee reluctantly agreed to re-open the witness list.

Throughout the summer months the concern over certain aspects of Bill C-10 grew in my riding, and in fact all over coastal B.C., to the point where my list of witnesses expanded from a mere 3 or 4 to a full 25 to 30. These were not industry representatives. They were mayors, councillors, presidents of chambers of commerce, small business owners, fishermen and even people currently living close to a marine park on the Queen Charlotte Islands. They all had their areas of concern and all wanted their opportunity to speak to the committee.

Mr. Speaker, you can imagine my surprise when I presented this enthusiastic list of concerned coastal Canadians to the committee and received a less than enthusiastic reply. It was obvious the committee was not pleased with what had transpired over the summer.

I will not single out any particular member of the committee as they know who they are, but I was faced with the committee saying that it could not hear from all my witnesses because it would just take too long. The committee also said that if it heard from all the witnesses from my province then it would have to hear witnesses from other provinces and that there simply was no time.

I think there was a lot of time. If we are going to create a proper bill we should listen to witnesses from all over. If we take the time to do it right there will be a whole lot less opposition to the bill. The committee said that the bill had to be back in the House right away.

Mr. Speaker, I am paraphrasing but I hope you get the picture I am painting about the reluctance of the committee to hear from my witnesses. In the end I was told to negotiate with the clerk of the committee to get my witnesses on the list.

I understand that the committee did decide, reluctantly I believe, to set up video conferencing facilities in my riding and in Vancouver in order to hear from some of these witnesses. It was not enough to open the witness list to witnesses expressing concern for areas of the bill. The government would not be outdone. It filled the witness list with more environmental groups or representatives supporting the bill in order to more than even things off.

In the end the committee heard from more environmental groups supporting the bill than representatives of coastal or affected communities expressing concerns or reservations about certain aspects of Bill C-10.

I have to say that I am particularly disappointed that of my 25 to 30 prepared witnesses I was in the end allowed representation from 12 but only 4 of those were allowed to come to Ottawa. However I will say that those 12 witnesses were very representative of areas in B.C. I had, for instance, the mayor of Prince Rupert, Don Scott; the mayor of Kitimat, Richard Wozney; the mayor of Port Clements, Joan Ann Allen; the mayor of the village of Telkwa, Sharon Hartwell; the chair of the regional district of Bulkley Valley-Stikine, Joanne Monaghan; the regional district of Skeena-Queen Charlottes represented by Paddy Greene; the village of Smithers mayor, Brian Northup represented by Cress Farrow; industries like the B.C. Fishermen's Survival Coalition president, Phil Isaac; and the B.C. Seafood Alliance president, Michelle James. Representatives from the north coast oil and gas task force, Dave McGuigan and Reg Stowell were also present, as was a representative from the B.C. Chamber of Commerce who spoke on behalf of both the B.C. chamber and the Canadian Chamber of Commerce, noting that both had concerns about the potential economic effect the bill would have on communities.

I know I am going into a lot of detail about the process of the bill at committee, Mr. Speaker, but to understand just how much distrust there is out there, particularly in my home province of B.C., over the bill and its supposed guarantees of consultation, you need to know how little consultation there actually was and how hard it was to achieve the little leeway I was given for witnesses by the government.

Mr. Speaker, you need to understand that there were a number of letters received by the committee, phone calls to my office, faxes from concerned communities and even a unanimously passed resolution by the Union of B.C. Municipalities. By the way, it is nearly unheard of for UBCM to pass a resolution on the need for further consultation on federal legislation, and to pass it unanimously is an even greater feat. Even with that kind of pressure to slow the process down of approving Bill C-10, and with that strong suggestion from a group of elected officials representing a province with over three million residents, the committee chose to limit debate and discussion and, most of all, testimony from concerned witnesses to a mere 12.

I would suggest that it is no wonder British Columbians take no solace in the federal Liberal government's promise of full consultation with not only the provincial government prior to the creation of an MCA, but there is also no trust in its claim that an MCA will not go ahead if the local affected community is not in favour of it.

I would also argue that the government of British Columbia wanted more time to study the bill. To that end, I believe the B.C. minister of energy himself asked the federal government to delay passage of Bill C-10 until B.C. could complete its study on the potential for offshore oil and gas development in coastal B.C. This was a study planned to be completed by the end of January 2002 and the federal government could not wait a mere three months to appease the province with the largest coastline in Canada.

That is shameful and again exemplifies why coastal communities are simply afraid the federal government will come in with proclamations that it is there to help and charge in with directives and decisions without any concern for the needs and realities of those coastal communities. They believe, and with good reason, that the feds will force MCAs on coastal communities and the reality is that there is nothing in the bill that will prevent it from doing just that.

That brings me to the discussion on the amendments the official opposition tried to suggest in the committee's clause by clause review of the bill and were denied.

First I must say that we certainly did our homework. The official opposition listened to witnesses, read the submitted briefs and reacted. We came to committee prepared with a list of 30 amendments which, in our opinion, would have made the bill more palatable to both the province and, most important, to those affected coastal communities. Disappointedly, the Liberal government dominated committee and voted down all but one of my amendments.

Allow me, Mr. Speaker, to give you a brief synopsis of some of those defeated amendments, what they would have meant to the bill and how they could have been viewed as positive changes by the many concerned coastal communities.

On 10 separate occasions, in clauses 2, 5, 6 and 7, I tried my very best to include amendments that would have guaranteed the provinces a veto over the creation of any marine conservation areas created by the legislation and, as such, by the federal government, on either provincial land or areas where the jurisdiction of the land was under dispute by either the federal or provincial governments.

These were simple amendments that would have allayed any fears of either the province of B.C. or its residents of a unilateral federal government directive to institute an MCA in an area where, quite frankly, either the province did not see the need for one or because the provincial government of B.C. believes in consultation, that the coastal communities obviously did not want one.

In many cases the entire opposition parties were in agreement to these amendments. The Bloc member on numerous occasions expressed her concern about the legislation which once again trounces on provincial rights assured in the constitution. The PC/DR coalition member echoed these concerns as well and yet in the end, as per usual, the government members feigned interest but voted against the amendments.

At first I honestly thought it might be because they realized how good these amendments were and how needed they were to secure the support of coastal B.C. and, believe it or not, I thought the government might actually vote against these amendments in committee to save face and then introduce similar amendments at report stage to make it look like these were its ideas. We all know the government does that all the time with Alliance amendments. However, in this case, unfortunately, it did not.

This speaks to the horrible track record the Liberal government has when it comes to listening to the concerns of Canadians and then acting on them. As I mentioned earlier, it listens and feigns interest but rarely, if ever, does anything unless forced.

Here is an example of the wording of one of these amendments and the rationale I expressed as to why the bill needed to be amended. The amendment, known in committee evidence as CA amendment No. 3, dealt with clause 2. Specifically, we were trying to create a new clause 2, subclause (2) which would have read as follows:

For greater certainty, nothing in this Act shall be construed so as to abrogate or derogate from the existing rights of a province over public lands, including submerged lands, which fall within its provincial boundaries. As such, no marine conservation area shall be created without the specific approval of the affected province.

My rationale for such a simple amendment was simply that many of the witnesses on both sides of the issue expressed concern over not having an explicit provincial veto over MCAs in their province. Although clause 5, subclause (2) explains that the land needs to be the unencumbered right of Canada, it does not specifically address the requirement of the province to agree with the creation of the MCA.

Further to that, I explained that the purpose of adding the new clause in that section of the bill was specifically to mirror the reassurances the drafters of the bill felt necessary to include for the aboriginal peoples of Canada. We simply felt that if it was important for the sense of clarity that protection of rights given to aboriginal peoples in the constitution be included that it too was appropriate for the bill to include the rights of provinces to a veto as well.

It was not my intention to delete the current clause 2, subclause (2) dealing with the aboriginal veto to the creation of MCAs, but to move it to a new clause 2, subclause (3), thereby coming after the provincial veto in the bill. Although in my opinion this was, on the surface, a simple and practical amendment, the government decided to oppose it in committee and take another more negative approach to reassuring provincial rights in the bill. Allow me to explain.

The federal Liberal government members on the committee instead supported an amendment to clause 5 which put the onus of fighting the creation of an unwanted MCA on the backs of the affected province. The following is the government's amendment creating a new clause 5, subclause (3). It reads:

If a court of competent jurisdiction finds that Her Majesty in right of Canada does not have clear title to or an unencumbered right of ownership in lands within a marine conservation area, the Governor in Council may, by order, amend Schedule 1 by removing the name and description of the area or by altering the description of the area.

Further to my comments earlier about how this is the wrong way of going about creating MCAs, meaning that if they are created in an area that the province believes the ownership of that area is disputed and the federal government goes ahead regardless of that claim and creates an MCA, as mentioned, the onus is on the province to challenge the ownership of the federal government to that land. Not only could this process take years and end up costing taxpayers a hefty sum, but in the end a new clause is drafted such that even if the province wins the dispute and requests that the MCA be removed, the clause does not require the governor in council to amend it.

Instead it clearly states “The Governor in Council may, by order, amend Schedule 1”. That clearly is a may and not a shall, meaning that even if the province is successful in the courts, the federal government, through the governor in council, can choose to ignore the results of that court case.

For the record let me state that my amendment was not only much clearer and far simpler but was in the end opposed by the government. I hope the members in the House today and the senators, who hopefully will read this testimony, understand the picture I am painting. There is nothing in the bill explicitly stopping the federal government from imposing a marine conservation area on any province, whether it wants one or agrees to cede its rights to the land or not. This is a blatant abuse of power and is exactly why the federal Liberal government has such a poor relationship with the provinces of this great country.

That brings me to my amendment dealing with the environment and with resource uses within the MCAs. I brought forward, on eight separate occasions, amendments that would have made the legislation more balanced. As it is currently drafted, it is, in my opinion, far too heavily weighted on the environmental side of things and does not take into account the realities of life in coastal communities as well as the realities faced by industries that make their livings from harvesting the resources of the seas.

These amendments were not unrealistic and certainly were representative of the sentiments expressed by the witnesses who testified in committee and in written submissions sent by those who did not speak directly to the committee. Among those amendments, the most palatable to the committee should have been my amendment to clause 13. Clause 13 dealt with the prohibition of exploration and development of hydrocarbons within MCAs. The current clause 13 specifically outlines the prohibition of any exploration, development and exploitation of hydrocarbons, aggregates or inorganic matter from within an MCA. When I asked departmental officials to clarify whether this prohibition also outlawed directional drilling underneath an MCA, I was told that it did.

Therefore, again to allay any fears of coastal communities looking to the development of offshore oil and gas as a potential economic boom to their area, and because the passage of the bill would prohibit in perpetuity the development of that potential, I suggested the following amendment: “That clause 13 be amended to include an exception to the listed prohibitions”.

That exemption was to be a new clause 13.1 and was to read as follows:

The minister may permit the use of directional drilling equipment, in the case of sub-seabed drilling for hydrocarbons, from a point outside a marine conservation area, to a point below the seabed, within the marine conservation area, where the practices are determined by the minister to not pose any serious threat to the existing ecosystem of that marine conservation area.

To explain further, the amendment put the onus on the oil and gas industry to prove to the minister's satisfaction that directional drilling techniques are safe and pose no serious threat to the environment. I really thought this would be a win-win for both the government, or might I say the minister, and for the industry. In my opinion this was not slanted in favour of industry but, if anything, it did not close the door fully to oil and gas exploration but did not leave it wide open either.

However, as with the other amendments, the government summarily dismissed it and steadfastly voted against it in committee. That is why I had to move my report stage Motion No. 6 to delete clause 13. I felt that if we could strike a deal on setting guidelines for offshore oil and gas that the government should remove that clause and not specifically mention it so as to keep the door open a crack, just a little bit, for future consideration.

We can see the pattern. The government cracked the whip and its members one by one stood in their places and opposed this report stage amendment as well.

I could go on at length about the concerns I still have with the bill and about the abuse of power by the government throughout the entire consultation process on the bill but I do not have much time left.

I close by saying that this has been my first attempt at what is called shadowing a government bill. Many members may know that this is my first term in parliament and I am certainly new at it.

For a place which supposedly prides itself on its standards of democracy, on representing the wishes of those who elected its members and on working toward modernizing parliament to make it more effective, I can truly say that based on the experience I have had in dealing with the bill since early this year, this place and its committees are neither democratic nor representative.

I know the federal Liberal government has the seats and therefore the votes to pass the bill without a problem. However I stand here to strongly urge those MPs with coastal communities or MPs concerned about giving too much power to the federal government and the erosion of rights given to the provinces in the constitution, to stand strong with me and my party to oppose this badly flawed legislation. Oppose the bill. Send it back to the drafters for some severe editing.

If the government wants to create marine conservation areas, which I believe is a worthy endeavour, let us ensure it is done the right way the first time. I urge members to oppose Bill C-10 at the third reading vote.

Mr. Speaker, I move:

That the motion be amended by deleting all the words after the word “That” and substituting the following therefor:

Bill C-10, an act respecting the national marine conservation areas, be not now read a third time but be referred back to the Standing Committee on Canadian Heritage for the purpose of reconsidering clause 10 with the view to ensure that the affected provinces are given explicit veto powers over the creation of marine conservation areas.

Canada National Marine Conservation Areas ActGovernment Orders

November 6th, 2001 / 11 a.m.
See context

Bloc

Christiane Gagnon Bloc Québec, QC

Mr. Speaker, I am pleased to speak to Bill C-10. This is not a new bill; it follows two bills that were introduced in the House before that last election campaign, Bills C-8 and C-48.

At report stage, we can present amendments. The Bloc Quebecois has supported many proposals made by the government. The Bloc is not opposed to the protection of the environment, but rather to the way the federal government is acting in this matter.

We were against Bills C-8 and C-48 that were before the House before the election campaign, because they infringed provincial jurisdiction. The Bloc Quebecois proposed an amendment that it would have liked the government to accept. This amendment dealt with the protection of territories. The territory is either federal or provincial; as we know, the sea floor belongs to the provinces, according to the Constitution of 1867. The Bloc Quebecois opposes the principle of the transfer of these rights to the federal government.

Clause 10.1 was an irritant. While we were in favour of requiring negotiations with the provinces, it sets out consultations. This bill is weak when it comes to following through on the government's wishes, and history has taught us to be cautious. Members need only think of the millennium scholarships, and the whole issue of young offenders. The Bloc Quebecois will ensure that all of the necessary safeguards are in place to protect provincial jurisdictions and areas of responsibility.

The amendments moved by the New Democratic Party and the Canadian Alliance could be examined individually; they support the zones established to protect ecosystems. This is not the cause of our concern. My colleagues know this; I have already informed them.

There is the whole issue of overlap between different departments. There are three conservation zones: marine conservation areas, which come under canadian heritage; marine protection areas, the responsibility of fisheries and oceans, and marine reserves, which come under the Department of the Environment.

There will therefore be three different structures to complicate the situation. In the case of negotiations with local authorities or the provinces, there will obviously be a certain amount of confusion. The Standing Committee on Fisheries and Oceans was quite ineffectual in protecting marine areas, marine protection zones or marine reserves. There are several zones and there are three departments to manage the task.

Not only is there overlap within the federal level—and it is easy to see how this will create confusion—but there is also overlap in some provinces between Environment Canada and its provincial counterpart, such as in Quebec.

In Quebec, we have our own way of doing things. We proposed a number of amendments. We know that it is Quebec that established a memorandum of understanding with the federal government, which takes into consideration a master plan. This plan includes safeguards to protect the environment and ecosystems. Everything is in place.

This bill was not based on this approach, or if it was, it follows the federal government's centralist vision, the same way the government always does things.

Quebec had an innovative idea that made provision for jurisdictions. With this bill, the federal government is totally upsetting the approach of the Quebec government. It had proposed the master plan, and a law was enacted to protect a specific marine area, namely the Saguenay—St. Lawrence marine park.

My colleague, the member for Jonquière, who has often raised this matter in the House of Commons, is very familiar with the matter and knows what is involved in the law and the memorandum between the Government of Quebec and the federal government. A marine area was established in the Saguenay—Lac-Saint-Jean region where I come from.

This agreement provides very clearly that the area will not be transferred. It must not be assumed that Quebec will transfer the marine area, which is public land. The constitution provides that the provinces own crown land. This is therefore annoying. It would have been possible, with an agreement, to not go ahead with the land transfer. We would have liked this bill to incorporate the amendments proposed by the Bloc.

As people know, I am not the first to speak to this matter. My colleague from Portneuf is also a vigorous defender of Quebec's jurisdiction and of shared jurisdictions. He too spoke out against Bill C-8, Bill C-48, and now Bill C-10, saying we would not support it.

There are therefore a number of irritants. We also do not agree with extending the scope of the obligations of Canadian heritage. We know the Minister of Canadian Heritage goes in for propaganda a lot. Indeed, the Parliamentary Secretary to the Minister of Canadian Heritage was saying earlier that they would provide some education on the protection of marine areas. Education is a provincial matter.

Spending is another very subtle way of meddling in the jurisdictions of the provinces. I say spending, because when the government establishes a program, puts an infrastructure in place, we all know there are other officials working on it and setting up programs. The minister could simply say that she would prepare a fine kit for schools on the federal marine areas.

So there is overlapping. There is no agreement to extend the scope of Heritage Canada's obligations. There is also the complexity and inconsistency of the three departments. There is the centralizing goal. We have examples such as the Young Offenders Act, which is contrary to Quebec's legislation. I will come back to this later, since I will have the opportunity to rise several times today.

Thus, the Bloc Quebecois wanted an amendment that went much further to ensure that each marine area, for example, would be debated and negotiated separately. I know that we are not the only ones in the field who oppose the bill such as it is. I do not know how the other parties will vote, but there are several irritants.

We also know that marine areas often disrupt some ways of doing things in other Canadian regions. In the west, we are told that the local economy must be respected. Local economies must also be allowed to develop. Will this be inconsistent with marine areas? There are amendments that tell us we should really first investigate to determine whether a marine area can be established at a certain place. We are not against these amendments. We believe that some of them make sense. But there is more. We can imagine what the major irritant is and the whole underlying principle of this bill, that is that the government seeks to intrude into provincial jurisdictions.

Message From The SenateThe Royal Assent

June 14th, 2001 / 5 p.m.
See context

The Deputy Speaker

I have the honour to inform the House that when the House went up to the Senate chamber the Governor General was pleased to give, in Her Majesty's name, the royal assent to the following bills:

Bill C-12, an act to amend the Judges Act and to amend another act in consequence—Chapter No. 7.

Bill S-24, an act to implement an agreement between the Mohawks of Kanesatake and Her Majesty in right of Canada respecting governance of certain lands by the Mohawks of Kanesatake and to amend an act in consequence—Chapter No. 8.

Bill C-8, an act to establish the Financial Consumer Agency of Canada and to amend certain acts in relation to financial institutions—Chapter No. 9.

Bill S-17, an act to amend the Patent Act—Chapter No. 10.

Bill C-17, an act to amend the Budget Implementation Act, 1997 and the Financial Administration Act—Chapter No. 11.

Bill S-16, an act to amend the Proceeds of Crime (Money Laundering) Act—Chapter No. 12.

Bill S-3, an act to amend the Motor Vehicle Transport Act, 1987 and to make consequential amendments to other acts—Chapter No. 13.

Bill S-11, an act to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other acts in consequence—Chapter No. 14.

Bill C-13, an act to amend the Excise Tax Act—Chapter No. 15.

Bill C-26, an act to amend the Customs Act, the Customs Tariff, the Excise Act, the Excise Tax Act and the Income Tax Act in respect of tobacco—Chapter No. 16.

Bill C-22, an act to amend the Income Tax Act, the Income Tax Application Rules, certain acts related to the Income Tax Act, the Canada Pension Plan, the Customs Act, the Excise Tax Act, the Modernization of Benefits and Obligations Act and another act related to the Excise Tax Act—Chapter No. 17.

Bill C-3, an act to amend the Eldorado Nuclear Limited Reorganization and Divestiture Act and the Petro-Canada Public Participation Act—Chapter No. 18.

Bill C-18, an act to amend the Federal-Provincial Fiscal Arrangements Act—Chapter No. 19.

Bill C-28, an act to amend the Parliament of Canada Act, the Members of Parliament Retiring Allowances Act and the Salaries Act—Chapter No. 20.

Bill C-9, an act to amend the Canada Elections Act and the Electoral Boundaries Readjustment Act—Chapter No. 21.

Bill C-25, an act to amend the Farm Credit Corporation Act and to make consequential amendments to other acts—Chapter No. 22.

Bill C-4, an act to establish a foundation to fund sustainable development technology—Chapter No. 23.

Bill C-29, an act for granting to Her Majesty certain sums of money for the public service of Canada for the financial year ending March 31, 2002—Chapter No. 24.

Bill S-25, an act to amend the Act of Incorporation of the Conference of Mennonites in Canada.

Bill S-27, an act to authorize The Imperial Life Assurance Company of Canada to apply to be continued as a company under the laws of the Province of Quebec.

Bill S-28, an act to authorize Certas Direct Insurance Company to apply to be continued as a company under the laws of the Province of Quebec.

Pursuant to order made on Wednesday, June 13, the House stands adjourned until Monday, September 17, at 11 a.m. pursuant to Standing Orders 28 and 24.

(The House adjourned at 5.26 p.m.)

Private Disability InsurersPrivate Members' Business

May 15th, 2001 / 3:35 p.m.
See context

Etobicoke North Ontario

Liberal

Roy Cullen LiberalParliamentary Secretary to Minister of Finance

Madam Speaker, I would like to congratulate the member for Kootenay—Columbia for bringing forward the motion.

Like many members on both sides of the House, I too am sometimes visited by people who have had some difficulties with disability plans, whether they be private or the Canada pension plan disability program.

I understand his sense of frustration, but I would submit that the motion is flawed for two reasons. One has to do with jurisdiction, and he touched on that point, and the other has to do with the fact that it would run counter to a number of initiatives under way right now at the federal-provincial level. I would like to discuss that.

The motion would create the position of an ombudsman to oversee private disability insurers in Canada.

I agree that it is important for consumers of financial services providers to have access to an impartial and fair complaints resolution mechanism that handles complaints about their dealings with financial institutions in a fair and impartial manner.

However, as I say, for two reasons I am not able to support this motion and I will explain why in more detail.

The first reason is it has to do with jurisdictional considerations. The second concerns conflicts with initiatives already under way at the federal and provincial levels to enhance and harmonize existing complaint handling mechanisms. In other words, the motion could lead to duplication and overlap.

In general, the property and civil rights power in the Constitution gives provinces the jurisdiction to regulate the day to day business activity of federally and provincially incorporated non-bank financial institutions, including life and health insurers.

Accordingly, the federal government cannot designate a particular dispute resolution system for non-banks. Provinces have the power to require insurers to be members of particular dispute resolution mechanisms and specify the design of such schemes.

Ontario, for example, has established an insurance ombudsman office to deal with complaints from Ontario policyholders, including Ontario disability claimants. All insurers in Ontario are subject to this regime.

In other provinces, provincial regulators respond to consumer complaints about insurance providers either directly or by referring consumers to an appropriate industry redress mechanism.

Further, as hon. members know, the marketplace in which financial services operate today is characterized by convergence, competition and increasingly complex products delivered through multiple channels.

Given this environment, provincial regulators recognize that financial services providers should be able to assure their customers that complaints and disputes will be handled promptly fairly and impartially through a mechanism that provides a uniform level of easily accessible service.

In this context, a task force on consumer dispute resolution has recently been established by the joint forum of provincial financial market regulators. The task force is comprised of representatives from several stakeholder groups, including the financial services industry and consumer groups, as well as officials from the federal Department of Finance. The task force on consumer dispute resolution is investigating the possibility of a single ombudsman system for Canada.

The federal government recognizes that there are potential advantages for consumers in having a single point of contact for dispute resolution for all financial services complaints. As a result, we are committed to working with the joint forum and other task force members towards this end.

I would also point out that the federal government is working with the industry to establish a new Canadian financial services ombudsman, often referred to as CFSO, as mandated by Bill C-8, which is currently under review in the other place.

As the task force I referred to earlier is still in its early stages and its ultimate outcomes are unknown, we believe that it is essential to press ahead with the CFSO to ensure that consumers will have the benefit of a fair and impartial complaints resolution mechanism at the earliest possible date.

Two points about the Canadian financial services ombudsman are particularly relevant to today's motion.

First, the CFSO would operate independently from government and the financial services industry, with a board of directors that would have a majority of non-financial institution representatives. It would replace the existing Canadian banking ombudsman.

Second, the new ombudsman would reflect the preferences of consumer and small business groups for a cross-sectoral ombudsman office.

To facilitate the creation of a single ombudsman for customers of all financial institutions, the Canadian financial services ombudsman would be capable of accepting all financial institutions as members.

Banks will be required to join. Other federally incorporated financial institutions will be required to be subject to a third party dispute resolution system and, along with provincially incorporated institutions, will be eligible to join the CFSO if they wish to do so.

The Canadian financial services ombudsman would have the power to recommend awards to aggrieved customers and while its rulings would not be binding, it would also have the authority to publicize the names of institutions that did not comply with its recommendations.

Further, the Canadian financial services ombudsman would provide the Minister of Finance an annual report on the number of complaints received and the results achieved in addressing consumer and small business complaints.

The government hopes to have the Canadian financial services ombudsman in place as soon as possible after Bill C-8 comes into force. In addition, the government would explore ways for the Canadian financial services ombudsman to interact with initiatives that may ultimately be launched from the provincial dispute resolution initiative I discussed earlier.

The hon. member has put forth a worthy proposal. However in light of the other initiatives and jurisdictional conflicts I have outlined, the need for an ombudsman to oversee private disability insurers has been overtaken by other measures.

For these reasons I am unable to support the motion put forward by the hon. member for Kootenay—Columbia.

Canada National Marine Conservation Areas ActGovernment Orders

May 15th, 2001 / 12:15 p.m.
See context

Canadian Alliance

Gurmant Grewal Canadian Alliance Surrey Central, BC

Mr. Speaker, on behalf of the constituents of Surrey Central, I am pleased to participate in the second reading debate on Bill C-10, the Liberal government's attempt to create national marine conservation areas.

The objective of establishing marine conservation areas is to protect and conserve marine ecosystems found in the ocean environments of Canada and in the Great Lakes. The purpose of the bill is to establish rules that would allow the creation of national marine conservation areas.

The bill is actually unfinished business from the last Mulroney government. It took the weak Liberal government more than 13 years to tinker with the idea of creating marine conservation areas. It is still at step one after feeble attempts to introduce legislation in previous parliaments, namely Bill C-48 and Bill C-8. It shows the lack of commitment of the Liberals to protecting and conserving our environment.

In addition to preserving marine areas for the benefit and enjoyment of Canadians, the bill strives to establish a framework for regulating marine ecosystems and maintaining biological diversity. It is important to note that while environmental protection and sustainable development are important issues, they do not fall within the administrative responsibility of the Department of Canadian Heritage.

The bill makes provision for two schedules that are intended to include the names of marine conservations areas and reserves. The minister has identified 29 marine conservation areas and the intent to create new national parks, but in Bill C-10 the two schedules are blank. The actual locations of all 29 parks have not been identified.

As a past co-chair of the scrutiny of regulations committee I would imagine these lists could be filled in by regulation and we would find the 29 locations somewhere in the thousands of pages of regulations that no doubt accompany the bill. That is governing through the back door, not through the front door and not through the voices of elected members in the Chamber. The bill should describe the location of each park and that information should be inserted in the two schedules. I hope the matter is fleshed out during the committee hearings.

Bill C-10 would limit parliamentary input by giving cabinet the authority to create a new marine conservation area on crown land without going through the normal legislative process. Currently the government is required to come before parliament any time a new national park is to be established or an existing park is to be changed. The legislation would remove the power from parliament and would allow parks to be created or changed by order in council. That is ridiculous.

The minister states that activities such as commercial fishing and shipping would be appropriate in conservation areas. However all fishing, aquaculture, fisheries management, marine navigation and marine safety plans are subject to the approval of the Minister of Fisheries and Oceans and the Minister of Canadian Heritage.

Similarly regulations affecting navigation or safety rules under the responsibility of the Minister of Transport must be made on the recommendation of both the Minister of Canadian Heritage and the Minister of Transport.

Disposal regulations pertaining to sections 127 and 128 of the Environmental Protection Act require the joint approval of the Minister of Canadian Heritage and the Minister of the Environment.

What is to be done about these contradictions and overlapping responsibilities? Clause 13 of the bill would limit or prohibit the exploration and exploitation of hydrocarbons, minerals, aggregates or any other inorganic material in all marine conservation areas. I anticipate hearing from stakeholders about this clause at the committee hearings.

There are considerations with respect to private property and reasonable search and seizure. Clause 22 of the bill states that, in the discharge of their duties, marine conservation area wardens, enforcement officers and persons accompanying them may enter and pass through private property. This is an invasion of the property rights of law-abiding citizens.

The weak and arrogant Liberal government has shown its pattern of disrespect for privacy rights and interference with personal property. We have seen that in Bill C-5, the endangered species legislation, where the arrogant Liberal government refused to offer fair compensation to Canadians.

Enforcing regulations is a serious issue and it is not addressed in the bill. In reference to Parks Canada, the director of the organization suggested that the RCMP be allowed to be involved in enforcement activities. Currently Parks Canada is involved in a labour dispute with its park wardens over personal safety. The bill contains the same deficiencies as the National Parks Act. It does not give park wardens sufficient authority to enforce the law.

Since 1993 there have been three separate reports recommending that sidearms be issued to wardens in order to fulfil their responsibilities. With park wardens off the job and other law enforcement agencies overburdened with enforcing criminal code violations, wildlife is being slaughtered in our national parks. The bill does not address any of these situations.

The Canadian Alliance affirms the federal government's role in the preservation of Canada's natural and historical heritage such as national parks. It supports sustaining and developing national parks and marine conservation areas that exist for the benefit and enjoyment of everyone. It also supports sustainable development and environmental protection regulations that have been fully debated by parliamentarians, not through the back door but through this Chamber.

The bill would strengthen the power of cabinet while diminishing the effectiveness of elected representatives. The bill is virtually unnecessary because the regulatory framework already exists to accomplish what the bill purports to achieve. It is just a power grab by a department that understands that it has a weak minister who does not understand that the new regulations are not required.

The legislation would clearly limit the ability of parliamentarians to consider all options when new marine areas are introduced or existing areas are expanded, with no input whatsoever when new parks are being created. The weak and arrogant Liberal government, time and again, abuses the Chamber and uses elected members as a rubber stamp. It does not give enough opportunity for debate by elected officials. There is no reason for this tight fisted form of control and undemocratic manner of proceeding. Like the bogus changes the government is proposing to Bill C-9, the Elections Act, Bill C-10 is also virtually anti-democratic.

The scope of the bill, as it relates to fishing, aquaculture and transportation, is such that changes to any schedule should require an act of parliament. Affected communities would be at the whim of the minister. The bill would give the Minister of Canadian Heritage a free reign to create unlimited advisory committees for each marine conservation area.

Limitations on the size and structure of each committee should have been established in the legislation. Will the committee that hears the bill allow these limits and rules to be established? I doubt it very much.

These advisory committees would give the government an opportunity for patronage in the way membership is composed and would serve no other purpose than that of a rubber stamp under the guise of public consultation. What we have here is yet another job creation program for failed Liberal election candidates and their supporters.

If marine wildlife and ecosystems are to be protected, park wardens should have exclusive jurisdiction in the enforcement of laws and regulations relating to each conservation area. Unfortunately, wardens are increasingly finding that they cannot do a proper job due to interference from Ottawa.

The decision by Parks Canada management to transfer responsibilities from park wardens to law enforcement agencies like the RCMP is Ottawa's way of centralizing tight fisted control away from the frontline officers who have the practical experience to know what does and does not work in Canada's national parks. What a shame.

The bill is a mess. It is as much an assault on our environment as an assault on the stakeholders in the regions that will be affected by it. My heart goes out to my colleague the Canadian Alliance heritage critic because I cannot see how the bill can be fixed or amended during committee stage.

On the one hand, the bill is not required because everything it does can already be done under regulations. On the other hand, it is a power grab by the minister and should be stopped 100%. Those concerned about preserving the environment can see that after 13 years of trying to bring the bill forward for debate in the House the government does not care about the environment.

I hope the bill looks significantly different when it comes back before the House following committee hearings. However, knowing the government's record, I doubt it. I hope the minister's secret agenda of power grabbing is exposed. I hope Canadians see clearly how little the government cares about the environment.

Canada National Marine Conservation Areas ActGovernment Orders

May 15th, 2001 / 11:45 a.m.
See context

Canadian Alliance

Deborah Grey Canadian Alliance Edmonton North, AB

Mr. Speaker, I am pleased to rise again on Bill C-10, which is going through another life cycle. At the beginning of the 36th parliament it was Bill C-48 and at the end of the 36th parliament it became Bill C-8.

I was pleased to be critic at the time for Canadian heritage and I spent some time on the bill. However it now rises again. These things seem to die on the order paper fairly regularly. The bill originated in 1988 when the Mulroney government introduced the National Parks Act that would permit the establishment of marine parks.

I will not go through all the details but I will hit a few high points about the intent of the legislation. I do not think anyone in the House or across the country would disagree that environmental protection and sustainability are paramount. Whether they pertain to national parks, marine areas or regulating the pollution of large companies, environmental protection and sustainable development are very important issues.

However these issues do not fall specifically within the jurisdictional power of the Minister of Canadian Heritage. We talk about ecosystems, fish, aquaculture and so on. It would be wise to place some of the responsibility for these issues with the Department of Fisheries and Oceans. We could then talk about the Department of the Environment and how important it is to look at environmental sustainability in the whole area of marine conservation parks.

I also sense frustration with the amount of input parliament would have. I am not sure if this place is becoming more and more irrelevant.

Bill C-10 would pare down anything parliament would have to say on the issue. It would limit parliamentary input by giving cabinet the authority to create marine conservation areas on crown land without going through the normal legislative process. The question is, why bother with this place at all? Cabinet might as well get together, have coffee, bring up an order in council and throw a dart and pick a marine conservation area.

A lot of people and advisory committees have done an incredible amount of work on this issue. I have seen the maps and the areas and they seem well thought out. However the whole idea of going to cabinet and just zipping something through in a morning session, or maybe not even that long, maybe even before coffee, is no good. The House of Commons is where such debate should take place.

We know in the years we have been here that the amount of discussion and the power of parliament itself has been pared down. Members have also witnessed incredible growth in government. Budgets have ballooned. The debt has certainly ballooned and hopefully we are starting to control that. The annual deficit is somewhat under control. That is probably a good start.

Let us look at the amount of governing that would occur under marine conservations areas. Once a marine conservation area is established the minister may maintain and operate the facilities, conduct scientific research and monitor and carry out studies based on traditional ecological knowledge of the areas.

That is a nice tidy sentence. We can all guess where it may lead. It could lead to mushrooming bureaucracies, advisory committees and all kinds of studies and scientific research. Such things are essential but if they are not monitored they could fly loose. The legislation could be an entity unto itself. When members see the mushroom cloud it places under the government, a cloud with no checks or balances that will only get bigger and bigger, they should be careful.

This whole area unnecessarily expands the minister's domain to areas that fall outside her ministerial responsibility. The minister talks about marine conservation areas, which is again a nice thought and something that perhaps needs to happen sooner or later to a degree, but it is by order in council and should be under DFO control as much as anything else.

What about the Minister of the Environment? The bill would require the heritage minister to establish a management plan for marine conservation, ecosystem protection, human use and zoning. Somewhere in there surely the Minister of the Environment and his department should be involved. We then start saying that it is this department or that department and the whole thing blows loose because it gets bigger and bigger rather than adopting tighter checks and balances.

In addition, each marine conservation area would require the establishment of a management advisory committee to review and implement management plans. For every marine park or conservation area there needs to be a whole advisory committee. I am not necessarily questioning the wisdom of that. A lot of people have a lot of expertise in the area and I do not. I certainly respect the ability of advisory committees to review and implement plans.

However where does it stop? That is the question. This thing will get bigger and bigger. There must be rules and regulations and the government needs to come forward with them. Unfortunately we see no checks and balances in this piece of legislation.

Ministers have all kinds of power, which we have certainly seen. I could digress and talk about Bill C-15, the enormous omnibus justice bill, but there is no point in getting into that right now. It is certainly before the House. It is an unbelievable piece of legislation and an example of phenomenal ministerial power. I hope it gets chunked down into bite size pieces so we can deal with each section on its own.

Regarding ministerial powers and perhaps overuse of powers, the minister states that commercial fishing and shipping would be appropriate in conservation areas. I would like an expert to tell us those things rather than the minister.

In the last bill we talked about whether the minister would be able to curtail or eliminate commercial flights over marine conservation areas. What would that do to small charter companies that fly over the ocean three-quarters of their lives on the B.C. straits?

The clauses would allow commercial fishing according to the minister's will. All aquaculture fisheries management, marine navigation and marine safety plans would then be subject to the approval of the Minister of Fisheries and Oceans and the Minister of Heritage. Do we not see the thing getting bigger and bigger? It looks like mushrooming to me.

The whole idea of putting regulations into place is essential. However, how do we enforce them? We have seen all kinds of legislation over the years where regulations were put in place and not enforced. How do we enforce regulations? That is the frustration we see with the National Parks Act.

My colleague talked about Kootenay Park, Banff, Jasper and Yoho. The parallel is that the National Parks Act does not give park wardens sufficient authority to enforce the law. Park wardens drive around in their brown trucks. We see them all the time. I live very close to Elk Island National Park. It is 45 minutes east of my home in Edmonton. Lew and I ride out there a lot. We see park wardens and we know they are people we ought to respect.

I am a law-abiding citizen. When I see the rangers' authority I do not try to pull anything on them. We have gone around and around the block in the House about sidearms for park rangers. If a person is up to no good or wants to poach moose, elk or bison, they know park wardens are fairly powerless. The government is very irresponsible in terms of the National Parks Act.

The parallel can then be drawn: What would the government do with the marine conservation act? The director of Parks Canada has suggested allowing the RCMP to get involved. That is good, but there are lots of parks where the RCMP is more than a 12 minute drive away. Park wardens should have all the power and authority vested in them by the government and the minister to protect both wildlife and public safety.

For marine conservation acts the record is not stellar. We must ask what would happen. Would people be chased around in boats? Is that what enforcing the regulations would come to?

Let us look at the history of the legislation. This is the third swing around. Who knows when it might get passed? Is the government really committed to the legislation? It has died on the order paper a couple of times, as I mentioned. Will we put regulations in place that the minister will live by, or is this a grandiose plan that will not be enforced?

Many think parliament is irrelevant. A proposed amendment structure in the legislation would allow 20 days for amendments and a three hour debate on them. Such amendments may affect shipping lanes, commercial fishing, sport fishing, aquaculture, commercial flights, and who knows what. Recreational boating may not be allowed in some areas. If an amendment is put forward there would be only three hours to debate it. That is almost an admission that parliament is irrelevant and does not matter. Decisions would be made around the cabinet table.

The legislation would severely limit the ability of parliamentarians to consider all options when new marine areas are set up. The bill would give the Minister of Canadian Heritage free rein to create unlimited advisory committees for each marine conservation area. We know where that could go when people are absolutely unchecked.

Limitations on the size and structure of each committee must be established in the legislation. We need to make sure the parameters are in place. If we get an unlimited number of people with unlimited amounts of salary, and it looks like a big pot out of which we can draw cash, we all know that it could go on for a very long time. It may need to be studied for a little longer and, because it is important, we may need to bring in 15 experts. The thing needs some parameters in place but unfortunately we are not seeing that at this time.

I will wrap up by drawing a parallel with the land national parks and some of the things going on there. The parks of Banff and Jasper are absolutely glorious. They have a lot of building projects going on. The minister took her first swing out to those parks last summer or the summer before and was able to see first hand how fabulous these parks are and how important it is that we balance economic and sustainable development with environmental protection.

We want to make sure there is a balance in nature. We may not be able to please both sides of the equation but if I want to go to a park or spend money on a hotel or in a restaurant, I want to be able to do that. If I have the money to go camping in Jasper Park, I want to be able to go there and enjoy the pristine wilderness, have a campfire outside my camper and enjoy the campground. I am not sure that anyone ought to be telling me that I cannot do that.

It would be the same if we were talking about a marine conservation area. It is important that I am able to make use of that area but at the same time I do not want heavyhanded regulations. I want wisdom, not advisory committees. This may sound foolish, coming around in boats, but there needs to be absolute common sense from the government. I do not think we see that to this extent with some of the things I have discussed. I hope the government takes into account, when it swings through the legislation again, that too many rules and regulations certainly are unwise. At the same time, this just cannot be an open can or basket for people to help themselves.

I am really nervous about the fact that the minister would have far too much power and that it would be essential for joint ministries to work together. If we look at heritage we see that we have a marvellous heritage. We can also look at the Department of Fisheries and Oceans and the Department of the Environment. I certainly hope that no one is just trying to make a legacy for themselves. That would surely be unwise and people would be able to see right through that.

Canada National Marine Conservation Areas ActGovernment Orders

May 14th, 2001 / 4:30 p.m.
See context

Bloc

Christiane Gagnon Bloc Québec, QC

Mr. Speaker, I am pleased to rise to speak to Bill C-10, which replaces the now defunct Bills C-48 and C-8 dealing with the creation of marine areas, more specifically 28 marine conservation areas.

The Bloc Quebecois is not against protecting the environment, but it is against Bill C-10 for several reasons I will list now.

First, we are opposed to the bill because the federal government is grabbing the power to create marine conservation areas without any regard for provincial jurisdictions. Why is the federal government not consulting the provinces on this, more specifically Quebec, as it did for example with regard to the Saguenay—St. Lawrence marine park? Why in the case of Bill C-10 on the establishment of marine conservation areas is it not consulting Quebec and working together with it?

There is another example, phase 3 of the St. Lawrence action plan. There were consultations. Why is it that when it comes to Bill C-10 there was no consultation, which would be desirable and would benefit the population? Although it is being said that the federal government wants to establish marine conservation areas for the benefit of the people and their social life and to help the economy, it is ignoring the government of Quebec and provincial jurisdictions in this area.

The Bloc Quebecois opposes any attempt to duplicate and trivialize Quebec's jurisdictions over the environment, fisheries and oceans.

Again, this goes to show the bad faith of the federal government. When Canadian Heritage is involved, not too much attention is paid to Quebec's jurisdictions and to shared jurisdictions.

The Minister of Canadian Heritage has just announced an investment of $500 million in culture. It is typical again of this department: no consideration for provincial jurisdictions and no consultation. It just goes ahead without examining the action plan, if only on culture, with Quebec. Here again, in the marine conservation areas issue, the federal government's way of doing things is there for all to see.

Several witnesses appeared before the committee and said that there would be duplication and that there would be a new structure. The government wants to duplicate even within its own bureaucracy. We are wondering how consistently this bill will be applied.

The Department of Fisheries and Oceans and the Department of the Environment are both involved in the protection of the environment. When I talk about duplication inside the federal government, I am referring to these two departments.

How can we accept such a bill when several witness have told us there will be inconsistencies in the way it will be applied and in the management of marine conservation areas? A number of witnesses told us that this made no sense. Among those appearing before the Standing Committee on Canadian Heritage was the vice-president of the Fisheries Council of Canada.

The Fisheries Council of Canada is a trade association representing provincial fisheries associations in Atlantic Canada and Ontario. He told us:

If there's a need for legislation to establish marine conservation areas, it is our view that such legislation should be incorporated into the recently passed Oceans Act under the responsibility of the Minister of Fisheries and Oceans and administered by the Department of Fisheries and Oceans. It is simply inefficient—

These are his words, not mine.

—cumbersome public administration to bring forward this MCA initiative in its own act under the responsibility of a separate minister and a separate department.

We can therefore see that there is duplication, inconsistency and inefficiency to come, if Bill C-10 sees the light of day. He goes on to say:

The fishing industry, for example, is working with the Fisheries and Oceans minister and Fisheries officials regarding development of an oceans strategy for Canada and an approach to the introduction of marine-protected areas. These tasks are the result of the establishment of the Oceans Act in 1996, an act that states that the Minister of Fisheries and Oceans shall lead and facilitate the development and implementation of a national strategy for the management of estuarine, coastal and marine ecosystems.

He went on:

Bringing forward this MCA initiative at this time under the responsibility of the Minister of Canadian Heritage, to be administered by officials of Canadian Heritage, undermines the oceans leadership role assigned to the Minister of Fisheries and Oceans under the Oceans Act.

If the challenge for Canadian industry in the milieu of globalization is to be streamlined and efficient, we should be able to demand government structures that are also focused and streamlined. Regardless of the merits of MCAs, of this initiative, the manner in which it is brought forward will lead to confusion, duplication and conflicts in its implementation.

This witness testified at the committee hearings on the defunct Bill C-8, and the government has not really made any changes in Bill C-10. This is nearly exactly what was found in C-8. The witness called for the withdrawal of the bill and added:

The bill should be withdrawn. Discussions should be initiated with officials of the Department of Fisheries and Oceans with a view to bringing forward an amendment to the Oceans Act to specifically provide for the establishment of marine conservation areas, where warranted, as part of Canada's oceans strategy.

Another quote comes from Marc Kielley, the executive director in Newfoundland of the Canadian Aquaculture Industry Alliance, in February 1999. This is an association representing the interests of regional and sectoral aquaculture associations and their members, who raise fish and shellfish. He said:

Overall, while we respect the need for conservation, we object to the bill for a number of fundamental reasons. At issue: The coming into force of an act to create the national marine conservation areas will result in unnecessary and expensive duplication of existing legislation, specifically the Oceans Act, 1996, as well as the National Parks Act as amended in 1988.

Again, a witness representing the aquaculture industry felt that Bill C-8 should have been withdrawn. Therefore, if Bill C-8 should have been withdrawn, so should Bill C-10, because it is basically headed in the same direction, except for a few changes. The French version of the preamble of C-8 provided that marine areas had to be “représentatives et protégées”, whereas in the new bill, they must be “protégées et représentatives”. This is a very cosmetic amendment that does not deal with the core issue, namely duplication, overlapping and the ineffectiveness of this legislation.

In a number of departments, including two in particular, it would be hard to be consistent in implementing the law. The organization also stated:

So with regard to the implementation of the integrated management plans, the Minister of Fisheries and Oceans shall develop and implement policies and programs with regard to matters assigned by law to the Minister, and shall coordinate with other ministers, boards, and agencies of the Government of Canada the implementation of policies and programs of the government with regard to all activities or measures in or affecting coastal waters or marine waters.

Based on the foregoing, it is abundantly clear that Bill...is redundant legislation and, if passed, would only serve to confuse and complicate issues relating to the protection and conservation of marine resources and marine ecosystems.

To empower the Minister of Canadian Heritage for the MCA initiative effectively undermines the authority and mandate of the Minister of Fisheries and Oceans as provided for under the provisions of the Oceans Act. This should not be permitted to occur.

What is the difference between a marine protected area and a marine conservation area? How do these two seemingly similar elements fit into the overall tapestry of integrated coastal zone management? What about marine wildlife areas?

So, there are several issues here. It is somewhat in that spirit that we can emphasize the inconsistency of such a bill and its ineffectiveness. A number of people may have difficulties making a decision.

When the minister tells us that this is for the good of people, for the good of the community, from an economic, cultural and social point of view, we wonder.

When credible people, people with a certain amount of expertise on the issue, come and testify, we as parliamentarians are there to analyze the experience behind and the relevance of their recommendations. We always listen in good faith. However it is always disappointing when we see the government dig in its heels with a bill. The government has gone back to the drawing board three times and each time it has come back with a bill that is no different. It has ignored what the witnesses had to say.

I wish to cite what Tom Lee, the Director General of Parks Canada, told the Standing Committee on Canadian Heritage. He said:

The marine conservation areas fall under a partnership with other federal departments, basically, under the general direction of the Minister of Fisheries and Oceans. Under the Oceans Act, the Minister of Fisheries and Oceans takes leadership in putting in place the protective and management measures for Canada's oceans. That involves a number of federal departments, and the two other major ones are noted here, Environment and Canadian Heritage.

Once again, there are doubts about Heritage Canada's effectiveness in managing marine conservation areas.

I have here more testimony, this time by Marlon Quinton, a project co-ordinator who appeared before the committee. He said, and I quote:

This brief is submitted to the House of Commons standing committee on behalf of the Bonavista Bay and Notre Dame Bay National Marine Conservation Area Advisory Committee Cooperation.

As a committee, we have held a series of stakeholder meetings to exchange information and obtain feedback on the suitability of the proposed marine park, to date.

He continues:

Stakeholder workshops have been held on commercial fisheries, aquaculture, tourism, and mistrust of government and how to build trust. In our deliberations we have taken a careful look at what impact this initiative would have on the Newfoundland people who earn a living on the water and at whether Bill C-48 and the proposed NMCA could negatively affect traditional and existing livelihoods, incomes, property rights, and freedoms.

He added, for another reason:

We are mystified as to why Canadian Heritage is attempting to run a parallel conservation initiative under a separate piece of legislation.

We were presented with about two pages full of objections in connection with Bill C-10, should it ever see the light of day.

There is another. I wonder how all these recommendations came to be ignored, when they simply suggested that Bill C-10 be withdrawn and not proceeded with, as there were so many witnesses who were opposed to it.

Jean-Claude Grégoire, a member of the board of directors of the Alliance des pêcheurs professionnels du Québec, also indicated the harmful nature of the bill. He spoke of the alliance membership, describing them as primarily inshore fishers who generally use fixed gear and fish along the coastline.

He went on to say that, for all manner of reasons, he would:

—not be interested in seeing a marine conservation area as intended by the spirit of the law. This is unlikely to be accepted by those industries or communities that depend on the sea for their livelihood. It will clearly have to be acceptable to stakeholders.

Once again, we see economic concerns expressed.

In light of the inefficacy Bill C-10 would have, the Bloc Quebecois is opposed to going ahead with and supporting, this bill.

Then there is the matter of Quebec jurisdiction. Why in this bill did they ignore Quebec jurisdiction over marine areas? We find it regrettable that Bill C-10 did not respect the integrity of the territory. Why did we set up the Saguenay marine park in consultation with the community, the federal government and the Quebec government?

The Saguenay—St. Lawrence marine park would have been a model to follow. In 1997 the governments of Quebec and Canada agreed to pass legislation to create the Saguenay—St. Lawrence marine park. That legislation established the Saguenay—St. Lawrence marine park, the first marine park to be created jointly by the federal and Quebec governments, without any transfer of territory. Both governments will continue to fulfil their respective responsibilities.

There was also the St. Lawrence action plan, another example the government could have followed. The environment ministers of Quebec and of Canada announced phase 3 of the St. Lawrence development plan, representing a total bill of $230 million. How did they manage to agree in these two examples, and in the case of Bill C-10, which is on the table, and in the establishment of the 28 marine conservation areas, the government ignored Quebec's jurisdiction?

The government also knows that jurisdiction over the environment is shared under the Constitution Act, 1867. The federal and Quebec governments share jurisdiction over the environment. Here again, we can see the federal government's bad faith in this matter. The Constitution Act provides that: “in each province, the legislature may exclusively make laws in relation to: exploration for non-renewable natural resources in the province, development, conservation and management of non-renewable natural resources and forestry resources in the province, including laws in relation to the rate of primary production therefrom”.

When we see the lack of respect for provincial jurisdictions, which pertain to the exploration for natural resources, development, conservation and the management of natural resources, we see the government is ignoring provincial jurisdictions.

By refusing to use the Saguenay—St. Lawrence Marine Park Act as a model and by making title to the territory an essential condition for the establishment of marine conservation areas, the federal government would be able to establish marine conservation areas on submerged lands to which it claims to have title and thus bypass Quebec's environmental jurisdictions.

We are very disappointed with what the federal government did with the recommendations made by various witnesses, including with regard to the protection of provincial jurisdictions.

There is more. The witnesses came to tell us that marine conservation areas should not be the responsibility of Heritage Canada because of duplication within the federal government, with Fisheries and Oceans and Environment Canada both having a certain role to play with regard to the protection of ecosystems.

National parks come under the responsibility of Canadian Heritage, which is not necessarily doing its job. There are serious problems in some national parks. I could mention the case of Forillon park, where a cliff is threatening to slide and collapse. Nothing has been done to reinforce it, which puts the life of tourists and workers in danger. In the case of Mingan Islands park, money is needed. Several islands are threatened by erosion. Witnesses raised several problems in national parks.

Why does Heritage Canada not fulfil its responsibility in this area instead of dealing with problems that are not its concern? If it wants to do things right, it should start by doing the things for which it is responsible.

Canada National Marine Conservation Areas ActGovernment Orders

May 10th, 2001 / 5:05 p.m.
See context

Canadian Alliance

Andy Burton Canadian Alliance Skeena, BC

Mr. Speaker, I rise today to speak with great concern about the government's Bill C-10, an act respecting the national marine conservation areas of Canada. Before I comment on the areas of the bill that I find quite concerning, I would like to make the following statement.

I believe that Canada's natural heritage should be protected and that it is our responsibility to ensure a viable environment is passed on to our children and our children's children in perpetuity. However, I also believe that the very survival of many remote and coastal communities, particularly those in my riding in northern British Columbia, depend on natural resources.

British Columbia has been blessed with beauty and an abundance of natural resources, many would say more than enough to go around. Yes, we must protect our natural environment, but we must do so with the understanding that not all industry is harmful to the environment and that the economic sustainability of many coastal and remote communities hinges on their ability to extract or harvest those natural resources, be it fisheries, forestry, mining or drilling for fossil fuels. This is a reality we cannot overlook.

As members of the House undoubtedly know, the bill has had a rather difficult time making its way through parliament in the past.

An earlier form of the bill was introduced in the House of Commons during the 36th parliament as the then Bill C-48. It was referred to the Standing Committee on Canadian Heritage which heard evidence in February and March of 1999. Bill C-48 then died on the order paper when parliament was prorogued.

It reappeared in the second session of the 36th parliament as Bill C-8. It made its way as far as report stage. Although it was amended slightly in committee, it too died on the order paper when parliament dissolved to the call of the October 2000 election.

Bill C-10 before us today is a reincarnation of both Bill C-48 and Bill C-8, taking into account the 1999 amendments.

I would venture to suggest that a lack of broad public consultation is the reason for previous versions of the bill being dumped from the government's legislative agenda in the past. I would say that it still needs much amending.

I do urge the government whip to allow her members to take a long hard look at the effects of the bill and allow their conscience to guide them in making much needed changes in committee and report stage.

At this time I would like to shift my attention away from the scope of the bill and narrow in on what I believe are some key areas of the bill.

To begin, let us take a close look at the preamble, specifically lines 4 to 10 in the government's definition of precautionary principle. The bill begins by stating:

Whereas the Government of Canada is committed to adopting the precautionary principle in the conservation and management of the marine environment so that, where there are threats of environmental damage, lack of scientific certainty is not used as a reason for postponing preventive measures;

The hon. members in the House today and the viewers at home may not realize that Bill C-10 considerably expands the concept of the precautionary principle. There is broad support for the wording of principle 15 of the 1991 Rio declaration on environment and development, which states:

In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost effective measures to prevent environmental degradation.

Members of the House should be concerned that since the precautionary principle guides the government in its decision making process, this substantially expanded version allows the government to essentially create marine conservation areas wherever it pleases; the definition is that broad.

By removing the words serious or irreversible when dealing with threat assessment, the government has carte blanche to decide what warrants a designation of a marine conservation area and what does not. This is not in accordance with the Rio declaration that Canada signed on to and, as such, is not an appropriate definition of the precautionary principle.

I would urge members of the House to demand the amendment of the definition. The precautionary principle is the guiding force determining what regions become marine conservation areas. It is not acceptable that this definition be expanded arbitrarily.

I am concerned with a few other clauses of the bill, which I believe either need to be amended or entirely deleted.

The government has said that the purpose of the bill is to establish the rules that will allow for the creation of national marine conservation areas to protect and conserve marine ecosystems that are representative of the 29 marine environments in Canada's coastal zones and the Great Lakes.

Unlike national parks, whose resources are fully protected, marine conservation areas are managed for sustainable use, except where forbidden by clause 13, which deals with the exploration and extraction of any and all mineral or other deposits within a marine conservation area.

The bill would allow for sustainable use within the marine conservation area, with a focus on recreation, tourism, education and research.

Currently, federal-provincial agreements are either in place or under consideration for four parks, representing five of the twenty-nine marine regions. The proposed Gwaii Haanas park on Queen Charlotte Shelf in the Hecate Strait marine regions is in my riding of Skeena. This park could represent an area roughly equivalent to one-sixth of my total riding.

I must say that there are those who believe the intent of the legislation is to forbid any form of development within marine conservation areas and, further, to go beyond protecting the original 29 marine regions the legislation was designed for and to create many more new marine conservation areas. This is of grave concern to me and to many other Canadians.

As is mentioned in the bill, these 29 marine conservation areas would be zoned for different uses. Some may be zoned strictly for tourism, others for science, and there are many who believe most of these marine conservation areas would severely restrict any human activity, but more specifically industrial activity.

Whatever the original intent of the bill may be, I would urge members to take specific notice of clause 13, which specifically forbids any mineral or inorganic resource extraction within all marine conservation areas. Allow me to quote from the bill in clause 13 on page 9:

No person shall explore for or exploit hydrocarbons, minerals, aggregates or any other inorganic matter within a marine conservation area.

I ask the House to reflect on why the bill needs such a severely restricting, overarching clause affecting all marine conservation areas when it is supposed to be the intent of the bill to zone each area for specific usage, unless of course it is the government's intention to shut down those industries in Canada that rely on the extraction of such materials.

Furthermore, I find it quite strange that members of parliament representing areas of Atlantic Canada would not strongly object to such a clause since some of them hail from a province like Newfoundland, where the famous Hibernia offshore drilling program has successfully and, may I say, in an environmental manner penetrated the ocean's floor, and its very existence is ensuring the lives and well-being of many Newfoundlanders and Atlantic Canadians. Should such a bill and clause have been introduced prior to the Hibernia project and even prior to any exploration for that project, it possibly would never have been.

I would like to press on in this vein a little further and say that the legislation could prevent any further exploration and development off the shores of Newfoundland. For that matter, it could prevent such development off the shores of Canada, period, be it in our Atlantic, Arctic or Pacific oceans. Of course many will say that is true only if those specific areas are designated as marine conservation areas. That brings me to my next concern with the legislation.

I ask hon. members of the House to take note of clause 5 on page 4. Subclause 5(1) is most distressing and represents what is fundamentally wrong with the government. It seriously undermines the effectiveness of elected representatives in the House. I believe that once the members in the Chamber today hear what I will read from the bill they cannot help but understand that there need to be serious changes to the bill for it to be accepted in the Commons. I will quote from subclause 5(1):

Subject to section 7, for the purpose of establishing or enlarging a marine conservation area, consisting of submerged lands and waters within the internal waters, territorial sea or exclusive economic zone of Canada and any coastal lands or islands within Canada, the Governor in Council may, by order, amend Schedule 1 by adding the name and a description of the area or by altering the description of the area.

In plain English what this means is that the Prime Minister and his cabinet can decide out of the blue to create a marine conservation area in any member's riding or backyard. Yes, the bill does recommend that the Minister of Canadian Heritage consult with those she or he deems to be affected people, but it does not guarantee that their opinions will be heard and agreed to. It is conceivable, should parts of the St. Lawrence be considered a marine conservation area, that the government could restrict or reduce fishery catch levels for various species, or even shipping levels. The heritage minister might even choose some of the most fertile fishing grounds on the east coast or, for that matter, the west coast, and deem them marine conservation areas. There would be nothing we as elected members of parliament could do about it.

How does the minister think this will sit with Canadians and more so with coastal communities whose very survival in many cases depends on the resources they can extract from the sea? The power the bill in this clause takes away from Canadians and their parliament and places in the hands of a very few insiders, cabinet members, is appalling. I know my constituents will not stand for it and neither will I.

I implore members of the House to demand the amendment of the clause and to return the power of creation and enlargement of these marine conservation areas to the hands of parliament, where it will receive much reflection, consultation and thought. We are accountable to our constituents and to Canadians.

I know my comments in the House today may seem strong and passionate, but when I read on to the end of clause 5 to subclause 5(3) my blood really boils. There is no doubt that Canadians listening today should be outraged at the fact that cabinet is the sole body creating and enlarging marine conservation areas. However, it should incense them even more to learn that the body that creates these areas does not have the power to reduce or eliminate them.

Let me explain. It is all right for the government to expedite the creation of these marine conservation areas and to wield the swift power of cabinet to that end, but to reduce or eliminate an area would take an act of parliament. Allow me to read once again from the bill. I would ask members to take note of subclause 5(3) on page 5:

No amendment may be made by the Governor in Council to Schedule 1 for the purpose of removing any portion of a marine conservation area.

Of course I agree that parliament should be the body deciding on whether or not a marine conservation area should be designated. However, what Canadians may not realize is that only the government can raise in the House an amendment to an act of parliament, meaning that it would have to be the will of the government of the day to amend or remove a marine conservation area. It would not be up to individual members to do so. Although we as elected members would have the opportunity to debate such a bill, we could not make any changes on our own.

It is also important to note that it is not uncommon for a bill to take up to one year to make its way through the House of Commons and its standing committee, to the Senate and then to receive royal assent. Depending on the priority the government places on the bill, it could take even longer.

We know that in reality the time a bill spends in the House of Commons or the Senate is controlled by the government. It has been known to push bills through in weeks and it has also dragged its heels on some bills for years, not unlike what has happened to the history of this bill, I might add.

The point I am trying to make is that the government does not need to abrogate its democratic responsibility by allowing clause 5 to stand. It already has the power to push bills into law and could create as many marine conservation areas as it likes.

I would urge the government to do the right thing and allow parliament its due evaluation, consultation and amendment of bills relating to specific marine conservation areas, not ram this omnibus piece of legislation through the House.

I would ask members to support amendments to the legislation that would see the need for the government to introduce specific legislation for every marine conservation area it plans to designate.

I would ask members to support amendments to remove clause 13. As mentioned, that clause would eliminate the ability to ever extract resources from the marine conservation areas regardless of the environmental viability of any project.

I will leave you and my hon. colleagues with these final words of caution and conscience. Members should ask themselves how their constituents would react if their fishing grounds were to become protected under the bill. How would their constituents feel if their activities, those which, I might add, put food on their tables and clothes on their children's backs, could not be continued? What if they were told they could not work or that the bill would drastically affect the future of their community? I would venture to suggest members of parliament would want to consult widely, bring their concerns to the attention of the minister and have their day in the House to express those opinions and to convince their colleagues to support their endeavours.

As this bill currently stands, hon. members will never have that opportunity. That is wrong. Therefore I move:

That the motion be amended by deleting all the words after the word “That” and substituting the following therefor: Bill C-10, An Act respecting the national marine conservation areas of Canada, be not now read a second time but that the Order be discharged, the Bill withdrawn and the subject matter thereof referred to the Standing Committee on Canadian Heritage.

Canada National Marine Conservation Areas ActGovernment Orders

May 2nd, 2001 / 4:45 p.m.
See context

Bloc

Suzanne Tremblay Bloc Rimouski-Neigette-Et-La Mitis, QC

Mr. Speaker, it is a pleasure to rise in the House to speak to Bill C-10, an act respecting the national—they have now become national—marine conservation areas of Canada. They were only marine conservation areas before. Now they have become national marine conservation areas. It is a huge change that occurred between the 36th and the 37th parliaments.

For the benefit of the people who are watching us, I would like to remind the House that, in the first session of the 36th parliament, the government introduced Bill C-48, which dealt with this issue but left out the word national and just talked about marine conservation areas.

The bill died on the order paper, because the Prime Minister decided to prorogue the House and start a new session.

There was a new throne speech, in which the Prime Minister told us that his government had realized that it was time to put an end to federal-provincial overlap. That was quite a major announcement. We looked forward to see how it would come about. It was a disaster.

Soon after, Bill C-8 was introduced. It came earlier in the session, as we can tell from the number it was given. It was introduced at the beginning of the second session of the 36th parliament.

During the first session, the bill had gone through first and second reading. Witnesses had appeared before the committee, a report had been tabled in the House and recommendations had been made. At the time, we thought that Bill C-8 would include improvements since the government had taken its time and had let public officials, lawyers, parliamentarians and witnesses spend time on it. We thought “All this money will not go to waste; the government will improve Bill C-8".

No such luck. Bill C-8 was a carbon copy of Bill C-48. The bill went through first reading, second reading, and was referred to a committee, which heard witnesses and reported back to the House and made recommendations.

My former colleague, the hon. member for Portneuf who made the wise decision of going back to teaching, would be very disappointed to see Bill C-10, because after spending so much time on Bill C-8, he would feel that it was a waste of his time.

However, in all fairness to the government, I must say that Bill C-10 does include a few changes.

Some changes were made in the preamble. For example, the French version of the old bill provided that marine areas had to be “représentatives et protégées", whereas in the new bill, they must be “protégées et représentatives". It goes without saying that this change, which is found in the preamble, adds a lot to the bill.

The government also seeks to "recognize that the marine environment is fundamental to the social, cultural and economic well-being of people living in coastal communities". If the marine environment is essential to the development of coastal communities, from a social, cultural and economic point of view, why should we have marine areas where people will have to pay, as is the case with every national park? We have beautiful national parks, but we must pay to visit them.

The idea was to protect ecosystems. The idea was to make sure that future generations would see the splendours of this vast country, but those who do not have money can no longer see this natural beauty, because they have to pay to do so.

One has to see how the government behaves. I will use an example with which I am very familiar. I see my colleague from Charlevoix. We both live in a coastal area, an area where there are problems in the lumber industry. What is being done to help our loggers? Nothing.

We have a lot of problems with fishers. What is being done? Sure, there are all kinds of problems. Quotas are being given to other provinces, but the government is even unable to honour Quebec's historic fishing quotas. We are demanding our fair share, but it is being denied. Quotas are being given to people who never had any before, when the policy has always been to honour Quebec's historic quotas.

We have problems with loggers, with fishers, with seasonal workers. We were promised a reform of the employment insurance plan, which is not forthcoming. How do you think our coastal communities will react when the government tries to take their lands to create national marine conservation areas? I think we will be able to occupy our lands to fight expropriation. We will take action in due course.

This government's arrogant attitude in forging ties with the communities will not serve it well when it tries to take their marine property, ignoring all social, cultural and economic considerations. A marine area will not put food on the table for people in our ridings.

There is something else. The government wants to promote an understanding of the marine environment and provide opportunities for research and monitoring. If being ridiculous were fatal, the people in the government over there would all have been dead long ago.

I am going to return to some of the statements referred to by my colleague, which I find extremely important.

In the 1996 report of the auditor general, chapter 31, on the management of national parks by Parks Canada, the auditor general makes the following statement “In the six national parks we reviewed, Parks Canada's biophysical information was out-of-date or incomplete except for La Mauricie".

It seems that everything is fine in La Mauricie National Park. Curiously it is in the Prime Minister's riding. In five national parks out of six that were studied, there were problems with biophysical information. What are we going to do to promote knowledge of the marine environment and encourage research and monitoring activities? How can the minister do so when the parks have been in existence for some time and are incapable of doing this at present?

The text continues "Monitoring the ecological condition of the ecosystems in national parks is a high priority, according to Parks Canada policies and guidelines. However, in many national parks—he looked at six—the ecological conditions are not monitored on a regular, continuing basis." What will be done in the marine parks if this is not even being done in the major parks?

The text also states that management plans for 18 national parks were an average of 12 years old, even though they ought to be reviewed every five years. A fine business: the plans are to be reviewed every five years, but 18 parks had an outdated plan. This is the best that can be said in order to be elegant.

The plans set out strategic guidelines to protect the parks' ecosystems. If the plan is out of date after five years, what state can the ecosystems of the park be in when the business plan is 12 years out of date? That makes no sense.

The auditor general added “Delays in preparing management plans and ecosystem conservation plans reduce Parks Canada's ability to preserve the ecological integrity of national parks".

The auditor general's findings on the state of our national parks were pitiful. He said that in almost the majority of the parks visited there was no link between business plans and management plans. That is pretty terrific.

I wonder why officials are asked to do them if there is no link between the two. The auditor general also expressed concern about the fact that, in some instances, park management plans focus mainly on economic and social factors and little on ecological factors. This is what they are setting up in the parks to protect the ecosystems, and this is the department's last concern. The least of Parks Canada's concerns is looking after ecological factors, the very reason for its existence.

When the government says it is going to do this in marine areas, how can we be expected to believe what is written in black and white? The government's intent, its political desire, is not worth even the cost of the paper these things are written on.

The auditor general is also concerned about the impact of the marketing plan on the preservation of ecosystems. Thanks to its marketing strategy, Parks Canada expects to draw an increasing number of Canadians and foreign visitors, who will stay longer. This is about making more money, not protecting our ecosystems. This strategy should increase visits in off seasons.

We are concerned that Parks Canada's ability to preserve ecological integrity in national parks and ensure sustainable park use will be seriously challenged.

We want the legislation to be updated through Bill C-10, which includes good intentions, but already the government is not capable of doing what it is supposed to do with the parks, and I am not at all convinced that it will be able to do it with marine areas.

Another change is the provision to involve federal and provincial ministers and agencies, affected aboriginal organizations and coastal communities and other persons and bodies, including bodies established under land claims agreements, in the effort to establish and maintain the representative system of marine conservation areas.

Again, I see a good intention. However, when we look at how the government proceeded with the consultations on its own bill, we cannot give any credibility to that process.

When the original bill, Bill C-48 was introduced, we told the government “Show us the results of the consultations that took place". We talked about these consultations in committee. Officials came to meet us and said that consultations were held and that this or that came out. However, when we wanted to get the real results of the consultation process, we had to apply under the Access to Information Act.

You know what happens when you make an access to information request, Mr. Speaker, because you were once an opposition member. What it boils down to is that we have access to nothing, because what we receive are eight and a half by eleven sheets, usually with so many lines blacked out that it is impossible to read the text.

When I was young, we did exercises where we filled in the blanks. It would seem that access to information officials have retained memories of this experience and are supplying us with all sorts of blanks by blacking out the important bits that would allow us to understand the text. Since the text is full of blanks, it takes quite a bit of imagination to be able to make any sense of it.

Consultation produced absolutely nothing. We received 300 sheets of paper. Only 73 of them resembled a sort of little reply coupon, which was attached to the consultation document. Even then, we were unable to see the real results of the consultation.

When the department tells us that the purpose of its bill is to respond to the concerns of those consulted, I say that that is false. There is no evidence of this in the bill. In any case, we are unable to obtain the evidence. When someone is unable to prove what he is telling me when questioned, it is because there is no proof.

If there were, we would be handed the results of a real consultation, without a fuss, and told “Here are the questions we asked, here are the answers we received, and here is what we did with those answers". Instead, we are kept in the dark and told “Yes, we consulted".

It is very important to be increasingly more democratic in this country. The government just had 34 heads of state sign a declaration to the effect that democracy is the most important value. The government should apply democracy here, in our own country, before asking others to do it.

The bill also expands on this. This is an addition to the bill. After all, I can be fair. Clause 2(2) reads as follows:

For greater certainty, nothing in this Act shall be construed so as to abrogate or derogate from the protection provided for existing aboriginal or treaty rights of the aboriginal peoples of Canada by the recognition and affirmation of those rights in section 35 of the Constitution Act, 1982.

This was added in response to a request that they made or a concern they had expressed. I can see that the government responded positively to that concern, and this is a good thing.

Clause 2(3) provides the following:

The establishment of a marine conservation area within the exclusive economic zone of Canada does not constitute a claim to any rights, jurisdiction or duties beyond those set out in section 14 of the Oceans Act.

Earlier, my colleague pointed out the interesting points in this bill. When the government decided to end the overlap in federal-provincial jurisdictions, it forgot to look at itself.

The government will find itself with all sorts of marine areas. We will no longer know how to distinguish among them, what to call them, or who is responsible for what. I assume that at some point, if something happens, everyone will pass the buck and people will be left asking what is happening and who is responsible for what.

The Department of Canadian Heritage wants to create national marine conservation areas. Under the Oceans Act, Fisheries and Oceans Canada may create marine protection zones.

Frankly, how can one tell the difference between a marine protection zone and a national marine conservation area? The government is playing with words, with concepts, trying to take over as much territory as possible.

Under the Canadian Wildlife Act, the federal government, through Environment Canada, can create national wildlife areas and marine wildlife areas. Under the Migratory Birds Convention Act, it can create migratory bird sanctuaries.

I am thinking about the beautiful area I come from and about my colleague in whose riding the beautiful Saguenay-St.Lawrence park is located. The government might want to create not far from there a national marine conservation area, a marine protection zone or a national wildlife area because they might be useful to have in this area of the country. This would bring in more tourism, since this seems to be the goal. Moreover, a marine wildlife area could be created there, as well as a migratory bird sanctuary.

That would mean five things in the same spot because it is a beautiful area and the federal government will say “It is so beautiful, we are taking it over".

The government always finds a way to get into trouble. I hope that this session will quickly be prorogued, so that this bill will die on the order paper, because the government did not do its homework on this bill.

It has already been considered twice. We will have to ask witnesses to come back, once again. The government will probably say “So many witnesses were brought before the committee that there is nothing more to add". On the contrary, they would say “You did not understand a thing about what we said before".

The bill must be overhauled. It must take into consideration what the public wants. I see that my time is running out, so I will conclude.

I hope the government members have been listening carefully and have realized that the time has come to follow up on things that make sense. I really rely on the member opposite.

Canada National Marine Conservation Areas ActGovernment Orders

May 2nd, 2001 / 4:25 p.m.
See context

Bloc

Christiane Gagnon Bloc Québec, QC

Mr. Speaker, before dealing with today's issue, namely marine areas, I would like to point out that the members who are wearing a carnation today are doing so to mark the tough battle that is fought by people suffering from multiple sclerosis, a disease that primarily hits young people, including my daughter.

The bill before us today was introduced in the House by the Liberal government for the third time, after dying on the order paper during each of the two sessions of the last parliament, as Bill C-48 and Bill C-8 respectively.

This government, which is short on ideas, is coming back with the same bill, except for one thing: it has a different number. As for the rest, it is all the same as before. One would have thought that after listening to a large number of witnesses in committee during the last parliament, after hearing the concerns of parliamentarians in this House and after seeking a new mandate from the public, the Minister of Canadian Heritage would have changed her approach.

I would have thought the minister would have gone back to the drawing board to come up with a bill that was a bit more sensitive to the concerns raised by witnesses before the committee and by members in the House. Nothing was done. We are therefore very disappointed.

By introducing a bill which is a carbon copy of the previous version, the Minister of Canadian Heritage and her government have once again ignored anyone who did not share their views. That is why the bill is no more acceptable today than it was earlier.

The purpose of Bill C-10, an act respecting the national marine conservation areas of Canada, is to provide a legal framework for the establishment of 28 marine conservation areas, representative of each of the Canadian ecosystems. The Saguenay—St. Lawrence Marine Park is the 29th marine conservation area. It will not be governed by this legislation since it already has its own legislation.

It is also important to note that this bill follows a commitment made by the present Prime Minister at the 1996 convention of the World Conservation Union, held in Montreal. On this occasion, as in 1994, the World Conservation Union, which represents 74 governments, 105 government agencies and more than 700 NGOs, passed resolutions calling on all coastal nations to put marine conservation measures in place quickly.

First, I wish to say that the Bloc Quebecois has always been in favour of measures to protect our environment. I remind those listening that the Bloc Quebecois supported the government when it introduced its legislation to create the Saguenay-St. Lawrence Marine Park.

Why is the Bloc Quebecois opposed to this bill? Despite the fact that we support the establishment of environmental protection measures, the Bloc Quebecois opposes it because, instead of focusing on working together, as it did in the case of the Saguenay-St. Lawrence Marine Park or phase III of the St. Lawrence action plan, the federal government is introducing marine conservation areas with no regard for Quebec's jurisdiction over its territory and environment.

Heritage Canada is planning to introduce a new structure, marine conservation areas, which will duplicate the marine protection zones of the Department of Fisheries and Oceans and the protected marine areas of Environment Canada.

Heritage Canada wants to have marine conservation areas, while it has shown itself incapable of protecting the ecosystems in existing national parks.

One of the conditions essential to the establishment of a marine conservation area is federal ownership of the land where the area is to be established. Moreover, clause 5(2) of the bill provides that the minister cannot establish a marine conservation area, unless, and I quote: a ) the Governor in Council is satisfied that Her Majesty in right of Canada has clear title to or an unencumbered right of ownership in the lands to be included in the marine conservation area, other than such lands situated within the exclusive economic zone of Canada;

There is a fairly significant legal problem here, because subsection 92(5) of the Constitution Act, 1867, recognizes that the management and sale of crown land are matters of exclusive provincial jurisdiction. There is therefore no federal title in this context.

Furthermore, Quebec legislation on crown lands, passed by the Quebec national assembly, applies to all crown lands in Quebec, including the beds of waterways and lakes and the bed of the St. Lawrence river, estuary and gulf, which belong to Quebec by sovereign right.

In addition, this legislation provides that Quebec cannot transfer its lands to the federal government. The only thing it can do is to authorize the federal government to use them only in connection with matters under federal jurisdiction.

According to the notes provided us by the Minister of Canadian Heritage with regard to the bill before us, marine conservation areas are planned for the St. Lawrence, the St. Lawrence estuary and the Gulf of St. Lawrence. These are three areas in which the ocean floor is under Quebec's jurisdiction.

This almost sick propensity for the federal government to interfere where it has no business being is quite simply unacceptable. Fortunately, the Bloc Quebecois is here to remind it of this, and to condemn its actions.

This approach is even more incomprehensible because co-operative mechanisms already exist to protect ecosystems in the Saguenay—St. Lawrence Marine Park, and in the St. Lawrence River under the agreement entitled "St. Lawrence action plan, phase III" which was signed by all federal departments and Quebec departments concerned.

There are two examples that should be followed: the Saguenay—St. Lawrence Marine Park and phase III of the St. Lawrence action plan.

In 1977, the governments of Quebec and Canada passed identical acts to create the Saguenay—St. Lawrence Marine Park. This resulted in the creation of Canada's first marine conservation area.

One of the main features of that legislation is that the Saguenay—St. Lawrence Marine Park is the first Marine Park to be created jointly by the federal and Quebec governments, without any transfer of territory. The two governments will continue to fulfil their respective responsibilities.

This park includes only marine areas. Its boundaries may be changed only through an agreement between the two governments, provided there is joint public consultation in that regard.

This ought to have served as a model for the federal government in the creation of other marine conservation areas, but no.

Another model that the Minister of Canadian Heritage could have followed is phase III of the St. Lawrence action plan. That phase, which was announced on June 8, 1998, represented a total investment of $230 million that was shared equally by both levels of government.

Why does the heritage minister not follow these two successful initiatives and why is she now claiming exclusive ownership of the seabed to set up marine conservation areas, when partnerships in the area of the environment have so far been successful?

We wonder about the true intentions of the Minister of Canadian Heritage. Will the federal government respect Quebec's constitutional territorial rights in that regard, or will it again ignore it to create marine areas where it believes such areas are necessary?

The environment is a shared jurisdiction. Let us never forget that, under the Constitution Act, 1867, the governments of Canada and Quebec share responsibility for the environment.

Under section 92(1)( a ) of the Constitution Act, 1867, Quebec passed an act respecting the conservation and development of wildlife that specifies, in section 2, the role to be played by the Quebec minister of the environment and wildlife. It is the following:

The Minister of the Environment and Fauna ensures the conservation and development of wildlife and wildlife habitats.

Under Quebec's legislation, the minister also has the authority to appoint conservation officers.

By refusing to use the Saguenay—St. Lawrence Marine Park Act as a model and by making title to the territory an essential condition for the establishment of marine conservation areas, the federal government would be able to establish marine conservation areas on submerged lands to which it claims to have title and thus bypass Quebec's environmental jurisdictions.

This is why it is important to be on the lookout and to reject any form of regulation or action which would undermine the national assembly of Quebec in this regard.

The Bloc Quebecois will not let the federal government have its way on this issue nor let it fulfil its insatiable desire to trivialize our institutions, our rights and our laws, just as it is not giving in on social policy in the young offenders legislation saga.

Respect for the integrity of Quebec's territory alone justifies the fight the Bloc Quebecois is waging against this bill, but there are other reasons we must oppose it.

The federal government intends to create marine conservation areas under the responsibility of Heritage Canada, so there is a lot of overlap within the federal government. On the one hand, there is Heritage Canada and, on the other, there are marine protection areas under the responsibility of Fisheries and Oceans and marine wildlife areas under the responsibility of Environment Canada. A lot of people are involved here.

One question immediately comes to mind. What are Heritage Canada's reasons for establishing marine conservation areas? They can be found in the preamble to this bill.

It is establishing marine conservation areas “to protect natural, self-regulating marine ecosystems for the maintenance of biological diversity"; second, “to establish a representative system of marine conservation areas"; third, “to ensure that Canada contributes to international efforts for the establishment of a worldwide network of representative marine areas"; fourth, “to provide opportunities for the people of Canada and of the world to appreciate Canada's natural and cultural marine heritage"; and, fifth, “to provide opportunities within marine conservation areas for the ecologically sustainable use of marine resources for the lasting benefit of coastal communities".

As for Fisheries and Oceans Canada, it proposed the establishment of marine protected areas. However, in a discussion paper released by Fisheries and Oceans in January 1997 and entitled “An Approach to the establishment and Management of Marine Protected Areas under the Oceans Act", the purpose of marine conservation areas is also described.

In both cases, we are told that local people will have a significant involvement in the establishment of marine protected areas. I wonder how many information or organization meetings local people will be invited to in order to satisfy its bureaucracy.

Finally, Environment Canada is proposing, so as not to be left behind, to establish marine and wildlife reserves, expanding the notion of the national wildlife sanctuary beyond the territorial sea to the 200 mile limit within the exclusive economic zone under the Canadian Oceans Act.

These areas are also subject to the Canadian Wildlife Act, but require a different set of regulations, as the Fisheries and Oceans Canada discussion paper states on page 49. It is quite the pandemonium from what I can see.

At the hearings in February 1999, almost all coastal groups who appeared before the Standing Committee on Canadian Heritage to speak out against this bill emphasized their lack of understanding of the federal government's position.

They argued that the Canadian heritage initiative would duplicate what is already being done by the Department of Fisheries and Oceans and create a great deal of confusion.

I will read from some of the testimony given. According to Patrick McGuinness, vice-president of the Fisheries Council of Canada:

If the challenge for Canadian industry in the milieu of globalization is to be streamlined and efficient, we should be able to demand government structures that are also focused and streamlined. Regardless of the merits of MCAs, of this initiative, the manner in which it is brought forward will lead to confusion, duplication and conflicts in its implementation

Quoting from another witness, Marc Kielly, executive director, Newfoundland, Aquaculture Industry Association:

To empower the Minister of Canadian Heritage for the MCA initiative effectively undermines the authority and mandate of the Minister of Fisheries and Oceans as provided for under the provisions of the Oceans Act. This should not be permitted to occur.

Here is another excerpt, from the testimony by John Melindy, project co-ordinator, NMCA feasibility study advisory committee:

Now, through the Oceans Act, the Minister of Fisheries and Oceans is empowered to declare marine protected areas to conserve species under threat. In view of this fact, we are mystified as to why Canadian Heritage is attempting to run a parallel conservation initiative under a separate piece of legislation.

Why, then, call witnesses and then not pay any attention to their concerns? Why not look into the areas we were directed to by the various witnesses?

One thing is clear. The government would have been better advised to have a single department oversee the protection of ecosystems and the departments concerned conclude a framework agreement delegating their responsibilities to the one chosen to be accountable in this matter, but the Minister of Canadian Heritage refuses to listen to reason.

A number of witnesses emphasized the duplications within the bill, but that is not all. Is there even more confusion in this bill? If you answer yes, you hit the jackpot.

As unbelievable as it may seem, the bill provides that each federal department will retain its own jurisdiction over the marine conservation areas.

However, when the Department of Canadian Heritage deems it appropriate, it may, in co-operation with the department concerned, adopt regulations regarding a marine conservation area that differ from the existing provisions.

Although this might seem normal in other circumstances, the difficulties can only increase when Heritage Canada regulations are enforced in marine protected areas, marine wildlife reserves and marine conservation areas, each with their own regulations.

We have another good reason for opposing this bill: Heritage Canada is incapable of protecting the ecosystems in existing national parks.

In 1996, the Auditor General of Canada published chapter 31 on the management of national parks by Parks Canada. In this chapter, the auditor general made some, to say the least, embarrassing observations, some of which follow:

Monitoring the ecological condition of the ecosystems in national parks is a high priority, according to Parks Canada policies and guidelines. However, in many national parks, the ecological conditions are not monitored on a regular, continuing basis.

On average, the management plans for the 18 national parks were 12 years old, when they should have been reviewed every five years. The park management plans provide strategic direction for the protection of park ecosystems.

The auditor general added:

Delays in preparing management plans and ecosystem conservation plans reduce Parks Canada's ability to preserve the ecological integrity of national parks.

They cannot do their own homework regarding the follow up on national parks. How will they be able to do it for marine areas? The auditor general went even further when he said:

We are concerned that Parks Canada's ability to preserve ecological integrity in national parks and ensure sustainable park use will be seriously challenged.

Before duplicating what is basically being done elsewhere, including with marine wildlife reserves by Fisheries and Oceans, would it not be logical for the Minister of Canadian Heritage to ensure that national parks ecosystems are protected for future generations, as stated in the National Parks Act?

This bill is a means that the Liberal government wants to have to impose its centralizing vision.

This is a government that is anxious to intrude in provincial jurisdictions. With this bill, we are seeing the exact opposite of the “flexible federalism" that the Minister of Intergovernmental Affairs boasts about.

Thank goodness the Bloc Quebecois is there to condemn what the federal government is planning on doing, namely to duplicate and totally lack any consistency.

Canada National Marine Conservation Areas ActGovernment Orders

May 2nd, 2001 / 4 p.m.
See context

Canadian Alliance

Cheryl Gallant Canadian Alliance Renfrew—Nipissing—Pembroke, ON

Mr. Speaker, it is my privilege to speak as the official opposition critic for Canadian heritage on this bill, Bill C-10, an act respecting the national marine conservation areas of Canada, at second reading.

What we have before us today is the third attempt to pass this legislation. This bill was Bill C-48, then Bill C-8 in the last parliament, and now returns as Bill C-10 in this parliament. What does this tell us about the commitment of the government to this legislation? It tells us that the commitment is not very great and it is very evident why. Even after three tries this legislation remains seriously flawed.

First, let us not be fooled by the language that was originally used to introduce this legislation. I certainly would not disagree with a proposal that would require marine conservation areas to be established for the protection and conservation of “representative marine areas of Canadian significance” and would be “for the benefit, education and enjoyment of the people of Canada and the world”.

However, upon closer inspection the bill does far more than the government is prepared to admit.

The first area of concern I wish to draw attention to is one involving the consultation process and where these 29 representative marine conservation areas are to be established. As with the first two bills, in this current bill the schedule is blank.

What is the government afraid of? The government is afraid that the same thing will happen as what occurred in the Bonavista and Notre Dame Bays area in Newfoundland, when political pressure from the local Liberal member, and I suspect from the current industry minister and former premier, stopped a marine conservation area from going forward.

I am not criticizing the former member for Bonavista—Trinity—Conception for representing his constituents and their well founded fears that unemployment and economic hardship would follow the good intentions of a federal bureaucrat over 2,000 kilometres away in a comfy office, drawing a salary of $100,000 a year.

What about those ridings that have upheld the democratic process and elected a member of the loyal opposition or, worse, have an elected or weak or too compliant member of the government?

We have real fears when we read the literature from the minister's department that talks about replacing the checks, balances and safeguards of parliament for, in the words of her department, the “simple, cost-effective procedure” of order in council to establish or enlarge marine conservation areas. Previous debates have pointed out this very serious flaw and yet here it is a third time and still this flaw remains.

I pay tribute to my colleague, the member for Dauphin—Swan River, for his input when this bill was Bill C-48. He very clearly pointed out the Henry VIII clauses in the bill. I encourage recently elected members of the House to read the hon. member's speech. Henry VIII believed in the divine right to rule and was always looking for ways to sidestep parliament and its ultimate authority as an elected body. It seems some things never change.

The current process, where the act has to be opened up and amended when a new national park is contemplated or changes to an existing park are considered, may not be as efficient as the government would like but it is consistent with our democratic heritage.

As the government is now beginning to realize, democracy can be messy. It is this style of legislation, the Bill C-10s, that will span more Quebec City types of demonstrations. As this government seeks new and creative ways to exclude people from the democratic process, unfortunately we will all pay the price with a fractured nation. Separatism feeds on these sorts of government dictates. If the minister were truly interested in freedom of speech, she would not be proposing government by order in council legislation.

The people of Canada have much to fear from the consultation process of the Department of Canadian Heritage. The process is so flawed that not only does it ignore the advice of the people, it will not follow the advice of its own studies. Nowhere is this more evident today than in the example of Parks Canada and its reaction to a health and safety issue regarding park wardens.

The minister should know that there have been three separate reports since 1993 that have identified unsafe working conditions for park wardens, particularly with the significant increase in fines for poaching in our national parks. Park wardens are being put at greater and greater risk in the performance of their duties.

It took a ruling from the HRDC labour program inspector to force the department to respond. Did the department and the minister do the right thing and accept the recommendations of three separate reports, recommendations, I might add, that are supported by the Public Service Alliance of Canada and the Animal Alliance of Canada? No.

The minister chose to ignore the best advice given and is blundering forward with an ill conceived and costly measure that makes no sense at all. It is very clear that the minister has a very poor record when it comes to taking good advice.

The only reason we in the official opposition can see for the government to ignore its own advice would be because of some hidden agenda. The reported plan to replace park wardens with RCMP officers, with a detachment in every national park in Canada, is absolutely sinister. What better way for a federal government to enforce unpopular laws, laws that the provincial governments want no part of, than to do it with its own police force?

As the federal government enacts more unpopular laws on an unwilling rural population, how convenient that the federal police officers are there for the Liberal government to call upon.

This labour dispute that Parks Canada is having with its park wardens will impact upon this legislation in a very significant manner. Clauses 18 to 23 of Bill C-10, the enforcement section of the act, in the current labour dispute means the act would not be enforced. It is one thing to require RCMP officers on land to go after poachers. Has the minister, in her $37 million request to the treasury board for the money to replace park wardens with RCMP officers, also put in a request for boats?

This is beginning to sound like the gun registry boondoggle, where an $85 million cost has skyrocketed to $600 million and counting. The people of the city of Pembroke in my riding of Renfrew—Nipissing—Pembroke are currently in the process of raising the money locally to buy a CAT scanner, thanks to the federal government's two tier health care policy. That $637 million would save a lot of lives in the community of Pembroke and a lot in other parts of rural Canada.

I and members of the official opposition are very concerned about the consultative process, based on the concerns expressed to our members over the bias of this government against rural Canadians.

While I understand that the letter from the Mayor of Kitimat was made available to the members on the Standing Committee on Canadian Heritage when this legislation was called Bill C-48, I would like to quote from his letter as I believe it to be a fair reflection of the thoughts and feelings of rural Canadians:

Sadly, urban Canadians and senior levels of government seldom grasp the values associated with rural life, whether it be fishing, farming or forestry. All too often, regulation and legislation occurs that impacts rural Canada and rural Canadians significantly, while having little or no impact on urban life and, therefore, is supported wholeheartedly by the non-rural vote. In the best case scenario governments end up conceding ignorance. At other times a blatant disregard for rural Canadians occurs and is only rectified once social or economic crisis occurs.

It continues:

As a misunderstood rural population, we often wish the same commitment and daily practice toward our environment would be evident in urban centres. Often it appears that those who push for environmental and conservation laws do not enact the same values with their own regions...We understand our rural and remote populations are small, however...we chose to live in rural locations. At best, it is our hope that Canada be governed based on assessed needs and values of all Canadians...Further, we hope that persistent inaccuracies and ignorance of rural and remote lifestyles can be overcome.

The letter is quite a bit longer. However, I hope the essence of what the mayor was trying to convey about the legislation is apparent. The majority of Canadians, especially those of us in rural Canada, do not trust the federal bureaucracy to represent our interests fairly.

Even when we get good people who as public servants are trying to do the best job possible, they are overruled by their political masters, as is the case with the park wardens. Too often our interests have been sacrificed to political expediency.

There are too many votes for the Liberals in the city of Toronto to require it to deal with its own garbage. It is so much easier to dump it in someone else's backyard, in this case the backyard of the people in the riding of Timiskaming—Cochrane, near the pretty town of Kirkland Lake. Better to lose one seat than to jeopardize that big urban vote, and this government wonders why rural people should fear Ottawa when cynical calculations such as this are made by a troika of political manipulators. Actions speak louder than words. Where was the Minister of the Environment? For a government that is constantly looking for ways to intrude into areas of provincial jurisdiction, it suddenly became remarkably silent on the issue of Toronto's garbage.

I am optimistic that maybe this time, the third time the legislation has come forward, the government might surprise Canadians and address some of these concerns. For this I look beyond the minister and her cabinet cohorts to her caucus colleagues, in particular those MPs who represent rural constituencies.

Those Ontario MPs whose ridings border the Great Lakes should be very concerned about how the legislation will adversely impact farmers, fishing enthusiasts, resort operators and other small business people who are the backbone of our nation. They should not be fooled by the soothing words of the minister and her bureaucrats when they tell them not to worry, be happy.

How about the farmer who sprays his or her crops with herbicide? Once the marine parks act is in place the regulators will move into the watersheds. The legislation will finish off those farmers who have not already been pushed out of business by foreign subsidies.

The people of Newfoundland got off lucky when the marine conservation area in their backyard was stopped. Will others be so lucky when the legislation is passed? It was lucky for them when they raised their objections that it was not yet law. Do rural constituents favour letting the bill drop the way it was the first two times?

It is ironic that the minister's own riding borders Lake Ontario. It has been pointed out previously that her own legislation could be used to shut down her constituents' largest employer. Cootes Paradise is certainly a unique waterfront, so unique in fact that several years ago the answer to the pollution in Hamilton harbour was to pave the bay. I am very surprised that the minister is proceeding with the legislation that has the real possibility of doing great harm to her constituents.

By the department of heritage's own admission there is already enough federal and provincial legislation in place to protect and conserve heritage resources. Federal-provincial agreements are in place for marine conservation areas in Ontario and British Columbia.

Currently federal legislation is in place for the Saguenay region of the St. Lawrence River in Quebec. The federal legislation for St. Lawrence park was accompanied by complementary provincial legislation. Obviously the Quebec government saw the threat of federal intrusion and reacted accordingly. Why is there a need for the legislation other than the usual power grab by the Liberals?

It is no secret that the Liberal government is being pressured by NAFTA and the United States to allow bulk water sales. The trial balloon floated by the member for Toronto—Danforth before the summit of the Americas was no coincidence. Some Canadians are concerned that Bill C-10 is a Trojan horse for bulk water sales.

The legislation clearly impacts on provincial jurisdiction and would give the Liberal government the wedge it needs to start negotiations for bulk water export from the Great Lakes to the United States. These people are concerned that the government operates on the basis of multiple hidden agendas, except this agenda for water sales is being exposed for what it is.

What a coincidence that at the same time as Bill C-10 shows up on the parliamentary agenda a sister bill, Bill C-6, shows up. Surprise, surprise, it is all about licences for those people who want to engage in bulk water exports.

Perhaps it should be the Minister of Foreign Affairs who is identified as the sponsor of the bill. The legislation is a clear encroachment into an area of provincial jurisdiction. Once the bill is in place, the minister has arranged for any changes to be by order in council and thus avoid public debate in the House of Commons and in the media.

The province of Ontario is on record as opposing bulk water exports from the Great Lakes, and the federal government is currently unable to act without provincial agreement.

The legislation is conceived in such a way as to avoid that scrutiny. I challenge the federal government to accept amendments to the legislation that would expressly prohibit the bulk export of water from the Great Lakes and a clearer definition of sustainable use in national marine conservation areas.

The decision about whether Canada should or should not allow for the bulk export of water should be done in open and in public. The Toronto Star , as the in house organ of the Liberal Party, is opposed to bulk water sales. We know the government is deathly afraid of doing anything to disturb that Toronto vote and recriminations that would be heaped upon it by the Star in any debate regarding water.

The government is government by stealth. Unlike the Liberals we in the official opposition want open debate regarding any issue that impacts the public. Barring that and other changes we in the official opposition intend to propose, we are willing to tell the government to let the bill drop once again until, and only until, the concerns of all Canadians are met.

It is clear that the third time out the government is timid about Bill C-10 in public. I have had the privilege of meeting some parliamentarians on the government side who feel the same way the rest of us do who represent rural constituencies and must share the same fears I have expressed about this type of legislation.

The legislation, even if it were needed, is too flawed to go forth in its current form. We in the Canadian Alliance affirm the role of the federal government in the preservation of Canada's natural and historic heritage such as national parks.

We also affirm the right of Canada as a sovereign nation to govern itself in a way that benefits all its people. We do not recognize the inevitable loss of sovereignty every time the Prime Minister goes off and makes a commitment before an international body, in this case the IUCN World Conservation Congress in October 1996, without first consulting the people who will be most severely affected by such an agreement.

More important, we require the input of parliament before the people of Canada are put on the hook for something they may be very unwilling to support. The pretext for the legislation was that it was an international agreement. I do not believe the framers of that agreement at the UN intended the Government of Canada to use it in any other way to erode democracy in Canada.

This is not an issue for the Minister of Canadian Heritage. This is legislation, albeit in a greatly changed form, that more properly should be in the name of the Minister of the Environment. This point was made previously in debate on Bill C-48 and Bill C-8. The point needs to be emphasized here again: the issues before us and our international commitments concerning the environment should remain with that ministry.

On behalf of the Canadian Alliance I would like to be able to support legislation to create national marine conservation areas. However as the legislation is presented it is not justified in its current form.

I would now like to respond to those individuals who might be tempted to say that we should not throw the baby out with the bathwater because there are some worthwhile aspects of the bill that we surely can support. To those individuals I say there is nothing in the bill the government could not accomplish if it would just sit down and take the time to talk to the provinces, which in turn would require the federal government to talk to those communities that would be affected by the creation of a marine park. As proposed, the shortcut the bill is all about is not acceptable.

In conclusion, I call upon the minister to send the bill back to the drawing board. Maybe the fourth time out the government can get it right.

Farm Credit Corporation ActGovernment Orders

April 30th, 2001 / 12:50 p.m.
See context

NDP

Peter Stoffer NDP Sackville—Musquodoboit Valley—Eastern Shore, NS

Mr. Speaker, it gives me great pleasure to rise to speak to the upcoming changes for the FCC. I am speaking on behalf of our agricultural critic, the hon. member for Palliser, who unfortunately could not be with us today.

Also a special hello and thanks to the dozens of farmers in my riding of Musquodoboit Valley. They are some of the best producers in the entire country. I am very proud to stand in the House to represent them and quite proudly say to them that I and my party support the thrust of this bill, although there are always a couple of cautions that need to be addressed.

Overall, we thank the government for these much needed changes. Similar to our colleague from the Bloc, we hope they pass fairly quickly. Above all we hope the constant consultation and dialogue with the main producers and with those people directly affected by the legislation continues. That dialogue is extremely important for the future.

Who could forget the crisis in the agricultural industry over the last few years? Many of us were at farm rallies on the Hill and at rallies held throughout the country, especially in the prairie provinces. Statistics show that over the last two years 22,000 families in the western provinces alone have left the farm. If that does not constitute a crisis in the industry, I am not sure what does.

Being a fairly new MP, going into my fourth year in this place, I always felt that it should be up to the Government of Canada, irrespective of one's political leanings, to look after our agricultural industry. If we do not do this to the best of our ability then unfortunately we will seriously neglect what I consider the most important industry in Canada.

When members had breakfast this morning and when they have dinner tonight, I hope they appreciate the people who are willing to get up at all hours of the day to sow the seeds so our families can be nourished. I think I speak for all members of parliament when I say we are extremely proud of the Canadian agriculture industry. We are very proud of the thousands of farmers and their families who toil in the fields and factories so we can provide nourishment to our families on an ongoing basis. Above all they do it fairly cheaply.

Food costs in Canada as compared to other countries are relatively inexpensive. People who suffer through tight financial times always worry about the cost of putting food on the table. When we look at the overall picture of what it costs to put food on our table compared to other items which we purchase such as shelter, clothing, home heating oil et cetera, food is relatively inexpensive. Therein lies one of the problems we are facing today.

The price that producers get for their product is very low. This is one of the crises we have. Wheat is made into bread and the bread is sold in the stores but the price of that generally goes to the middle man; the marketers, store owners and so on. If a loaf of bread cost $1, I believe the primary producer may get about 6 cents. That has to change so our primary producers who feed us and export to other countries get better value for the work they do.

The FCC is a wonderful institution for farmers when they need to diversify or when they need to purchase new equipment in order to ascertain future funding so they can carry on their business.

A young man from Saskatchewan with his family and many other farmers appeared before our caucus a few months ago to describe the scene on the family farm. I asked this young man, who was about 12 years old, if he was going into farming like his father and grandfather. He said no. I asked if there was anybody else in his classroom who was thinking about taking up agriculture as a livelihood. The young man again said no. That begs this question: Who are going to be the farmers of tomorrow? We know who the farmers are today, and many of them are going through a crisis because they are not sure if they will be able to make out the year.

Nobody likes to go from crisis to crisis year in and year out. Farmers know very well that historically there have been great years and poor years. They have always got through those years. However a tremendous number of farmers from coast to coast, not just in the prairies but in Ontario, Quebec and Atlantic Canada, are going through a very difficult time. Anything the federal government can do to assist them should be done very quickly.

It appalls me at times when I hear the federal government say that it has a new aid package based on provincial funding and that it will give $6 out of every dollar for aid but the provinces have to come up with the other $4. Nova Scotia is going through a pretty severe debt and deficit situation right now. It simply does not have additional funding to give to its farmers.

Nova Scotia rightfully says that if the federal government is swimming in billions of dollars of taxpayer money then at least it should assist those provinces and others with more funding for farmers, at least to get them through this crisis stage so they can set up long term arrangements for the future.

I know the federal agriculture minister from Ontario is a decent fellow, but he made a comment regarding P.E.I. potato farmers that I am sure he will live to regret for the rest of his days. He said that maybe those potato producers should grow something else because of the recent battle with the United States.

That is easy for someone to say, but P.E.I. grows some of the best potatoes on the entire planet. They have diversified in potato farming. The infrastructure, the machinery, the plants and the workers were set up for that. Then the federal agriculture minister turns around and says that the battle with the United States is pretty tough so maybe they should grow something else.

If the federal minister honestly believes that, which I am sure he probably does not, then P.E.I. potato producers should say “Okay, Mr. Minister, if we are to diversify, what should we diversify into? Is the federal government going to provide the funding for us to diversify?” If that is indeed the case, the minister should back it up with dollars and then maybe some of those producers will grow something else. If the minister is suggesting that they need to grow something else after they already grow the number one potato product in the country—at least that is my biased opinion, coming as I do from Atlantic Canada—then he should at least back it up with some dollars.

Overall the changes in the FCC are positive, as long as the FCC continues to focus on the primary producer. That is essential. The Canadian Federation of Agriculture has indicated to us that it has no overall objections to the legislation. Credit Union Central of Canada, representing credit unions across the country, formed a committee to study this legislation. During the consultation process it fully supported the proposal as long as credit unions could participate in some of the services, equity financing and partnerships. This of course would include the caisses populaires of Quebec.

This aspect of it is extremely important. Bill C-8, the financial restructuring act, is now going through the House. It has gone through this place and is on its way to the Senate, ready for royal assent. It will create great change in the financial sector in the country. When all those changes happen it will be extremely important to ensure that agencies such as credit unions and caisses populaires, which play vitally important roles in our country, especially in rural Canada where most of our farms and primary producers are based, have an important say and a role in the future of how FCC does its business. If they do, they will continue to have our support.

The National Farmers Union is concerned that the FCC may soften its focus on family farms and primary production. The government and the FCC have made a commitment that farming and the primary producer would continue to be the main focus of the corporation. That is essential.

In order to maintain the so far lukewarm support of the National Farmers Union, which represents a tremendous number of farmers across the country, it is imperative that the government and whatever party is in government years down the road continue that important dialogue with groups such as the National Farmers Union to ensure that primary producers rural communities and those family farms are indeed integral to any decisions made.

The best way to do that is with open and transparent consultation. The federal government has been blamed many times—I think of the Sea King operation for example—for hiding behind its words, for other concerns it tries to hide from, and for not being completely open and transparent. I beg the government to ensure that it does not do this with our agricultural concerns. That would be a very sad thing.

The corporation's main focus would continue to be small and medium sized operations that contribute to local communities. We have to take the government and the directors of the FCC at their word. If indeed that is correct, they will have our support and the support of many family farms throughout the country.

However, again I would like to remind the government and those in opposition right across the country that it is imperative to maintain that and not lose sight of the main focus in years to come.

In fact, the FCC has only a handful of accounts with businesses that have revenues over $5 million. The majority of its day to day business is indeed with small and medium sized family farms. That is extremely important.

Another concern in regard to a lot of family farms these days is lease financing. Under the new legislation the FCC would offer lease financing directly to or in partnership with agricultural operators. There is a growing need for lease financing in the agricultural industry for operators who want to manage cash flows with increased flexibility. The 1993 act does not prevent FCC from offering lease financing. However, the new amendments clarify the scope of the corporation's service in that area. More important, with a more flexible financial structure the FCC will be able to create subsidiaries to partner with other organizations in offering more comprehensive financial packages.

With Bill C-8 and the concentration of our financial institutions, it is very important, at least in my mind, that farmers and primary producers have the option and flexibility to look for the best rates when it comes to their lending needs. The corporation would have access to additional financial management tools to secure its portfolio and offer expanded services to agricultural operations. A more flexible financial structure contributes to the viability of the FCC and its ability to serve agriculture in the long term. That is definitely what is needed.

The country deserves and demands an agricultural policy from A to Z that really meets the needs of the family farm and medium sized producers and ascertains and tells Canadians once and for all that in this country we will be able now and in the future to feed ourselves. An awful lot of people are concerned that we as a country may be losing our agricultural sovereignty. We simply cannot allow that.

I could not help but notice that one of the greatest fighters for the family farm, a gentleman from Ontario, is in the House today. I thank him for his personal efforts in bringing the issue of the family farm to the House of Commons and to his own government. He should be complimented for his work in creating awareness of the crisis on the family farm.

There are other concerns throughout the country. We would like to ensure that the family farm issue is not just not a debate in the House and is then forgotten. We would like the family farm issue to continue in the House and we would like to ensure that when changes need to occur we can meet those changes along the way.

It gives me great pleasure every September and October when I come to Ottawa to bring with me about 100 pounds of Annapolis Valley apples of various descriptions. I hand them out.

Budget Implementation Act, 1997Government Orders

April 2nd, 2001 / 5 p.m.
See context

NDP

Lorne Nystrom NDP Regina—Qu'Appelle, SK

Mr. Speaker, I would like to say a few words in the debate on the bill before the House today. In a way it is an omnibus bill and it deals with a couple of radically different items.

The first one is the appropriation of considerable sums of money to the Canada foundation for innovation. In fact we would appropriate, if this bill passes in the House of Commons, $1.25 billion to that particular foundation. The other item deals with a small but important change to the Canada pension plan.

I notice a greater propensity now on the part of the government to introduce omnibus bills and I think it is wrong in principle. We are dealing with two fundamentally different items here, and it would be easier to vote intelligently on a bill like this if these items were separate.

We have just come through that with Bill C-8, the changes to the financial institutions legislation. There were massive changes in the bill, which was 900 pages thick and amended 1,400 pages of statutes. That makes it difficult for members of parliament to properly scrutinize bills.

That being said, in terms of the Canada pension legislation change here I would like to say a few words about the Canada Pension Plan Investment Board. They are important to put on the record. The investment board is an innovation of the Government of Canada, whereby a small portion of CPP deductions from employers and employees will be or are invested privately in the stock market. Overseeing that investment in the stock market and advising where to invest is of course the new investment board of the Canada pension plan. The board has 12 directors. If my memory serves me correctly there is one director per province, which makes nine, because the Quebec pension plan is a totally separate organization and institution, and three from the federal government. The chair of the board is named from among those 12 people. The Minister of Finance will seek advice from each of the provincial ministers of finance and then appoint the 12 members of the board.

What is missing here is a small move to democratize the board. The Canada pension plan is a plan which has ordinary Canadian workers' money in it, so I think that on the board there should be representatives of the working people themselves, from trade unions, from retirees, who can provide valuable advice regarding the investments of the board. When we are looking at the investment of workers' money this should be one of the amendments the government should accept, that is, to have on the board people who represent the workers and the trade unions themselves. That is only fair in terms of dealing with the workers' money. There should be representatives of the workers on the board. That is a fundamental principle of democracy and it is important in order to democratize that particular institution.

In terms of the Canada foundation for innovation, I think all parties in the House are in support of the concept or the principle that we need more money for research and development. If we look at the history of our country, we will see that we are one of the few industrialized countries in the world that does not put much of our GDP into research and development. We have a very small proportion of our GDP in research and development compared to the United States, Germany, France or many countries in western Europe. We have to move more in that direction in terms of money going into R and D. This is a bill that is going in the right direction in those terms.

The Canada foundation for innovation became law in the 35th parliament, which is two parliaments ago. If memory serves me correctly it became law in April 1997. I had a chance today to take a look at some of the expenditures of the foundation. I must add that this is not a foundation that utilizes only public money. There is also money from the private sector. I assume the universities and provinces all participate in the foundation.

I would like to take a few minutes to read into the record the kinds of projects the foundation is supporting. Up to March 31 of this year, 1,175 projects had been funded, for a total of $873 million. That is a considerable amount of money going into research and development, technology, research centres and so on, which I believe is very important.

I will round off these figures to the nearest million. In British Columbia, 134 projects were approved for $110 million. That represents about 14.2% of the total amount spent by the foundation. In Alberta, there have been 112 projects for $58.7 million, representing about 7.6% of the funding from the Canada foundation for innovation. In my province of Saskatchewan, there were 28 different projects for $20.4 million, which is around 2.6% of the total. In Manitoba, there were 57 projects for $16.3 million or 2.1% of the total.

So far, western Canada has received about 26.5% of the total amount being funded by the Canada innovation centre. That is roughly in accordance with our population, which I guess should be one of the criteria.

Ontario had 434 projects and $311.7 million for some 40.2% of the funding. The province of Quebec has had 315 projects and $230.7 million for 29.7% of the funding.

New Brunswick has had 26 projects and $5.2 million or 0.6% of the funding. Nova Scotia has had 47 projects for $15.8 million or 2% of the funding. Prince Edward Island has had two projects for $730,000, which is .09% or one one-hundredth, roughly, of the funding. Newfoundland has had 17 projects for $6 million, which is 0.7% of the funding. The total in Atlantic Canada is about 3.7% of the funding.

That is a bit of an update as to where the money has gone. It is fairly evenly distributed across the country with the exception of Atlantic Canada, which seems to be receiving less than its fair share if we divide on a population basis the funds from this particular program. The program of course is ongoing and I assume that these figures and balances would change over time.

I think this is a worthwhile project. A lot of money has gone into it. I think members of the House would support it.

We would want, of course, to have time to scrutinize some of these projects to see what their value is and whether the taxpayers are getting the bang for the buck, so to speak, from the hundreds of millions of dollars we are investing. That should be looked at by a parliamentary committee. It might be one of the projects the committee could undertake in the months and years that lie ahead.

When it comes to the Canada pension board, we should look at democratizing the board and bringing in some representatives who are working people to contribute to the agency. There should be representatives from the trade unions of the country. Perhaps there should be a representative of retirees on the board, who can offer advice from a retiree's point of view. In other words, the board must be democratized.

If we look at the composition of the board now and at the 12 members on that board, we see that almost all of them come from business backgrounds and would be acceptable to the business community or to the business half of that equation of who pays into the CPP legislation in the country. However, there are really very few who have a background that might be more relevant to the ordinary working people or trade unions or retirees across Canada. Let us make that change.

In terms of the foundation, I think this is a step in the right direction. It should improve our country's investment in research and development. The relevant committee of the House of Commons should look at some of these projects to make sure due diligence is done. After due diligence is done, the committee should determine whether or not we are getting the impact in terms of R and D, learning and innovation, jobs and skills, and added value to the Canadian economy that is the vision behind the bill before the House today and that was the vision of the bill in April 1997.

Financial Consumer Agency Of Canada ActGovernment Orders

April 2nd, 2001 / 1:10 p.m.
See context

NDP

Joe Comartin NDP Windsor—St. Clair, ON

Mr. Speaker, I want to speak to the bill particularly surrounding the manner in which it affects credit unions. As my colleague from Regina—Qu'Appelle has already indicated when he addressed the House, we have serious reservations about the bill generally but do support it to the degree that it deals with credit unions. Some recommendations for additions to the bill have not been accepted by the government.

It is really important to set in context the role the credit union movement from our viewpoint and that of the government's needs to play in the country. That role is one of the only alternate systems of financial services we have. Those services unfortunately are spotty across the country because of the history of the development of the credit union movement.

Although the bill is designed to provide some strengthening of the movement to allow and permit for some expansion of the credit union movement, it simply does not go far enough.

It would allow for the development of what is being called a national services entity, or potentially even more than one. It would allow credit unions from various provinces to come together in a strengthened position. It is still fairly late in the game. They are at a distinct disadvantage with the banking system as it exists because of all the privileges and rights the banking system has been given historically in Canada.

It is important to draw to the attention of the country the role credit unions can play. Last week I asked one of my colleagues in the Bloc Quebecois about the role the Desjardins movement has played in Quebec in solidifying a financial service sector that is broadly based in response to the needs of its communities. In Quebec, and to a somewhat lesser degree in British Columbia, it has been very successful.

I also draw attention to something that I do not think is fully appreciated: the small and medium enterprise area which it has been of great of assistance to these communities. There have been a number of surveys which have shown that small or medium size businesses get much better services from the credit union movement. Unfortunately, with probably the exception of Quebec and maybe British Columbia, in the rest of the country's small and medium sized enterprises simply do not have sufficient services available from the credit union movement and institutions to meet their needs. These amendments in the form of Bill C-8 will go some distance in strengthening the movement across the country. However, as I indicated, it is not enough.

The other area where I think it is really important to note the strength that the credit unions have provided is direct services to individuals. In that regard, it brings to mind the movement by the big banks to close local branches. Of course, we have heard protests and opposition to the banks when they do this.

An area where the credit union movement helped was in one of the western provinces when one of the big banks was closing a large number of local branches. I think it was 13 or 14 branches. The credit union movement moved in and in effect bought the services, took over those branches and kept them alive and open for a number of small communities in western Canada. That, in smaller scales, has occurred right across the country.

One of the recent credit unions in my home province of Ontario got started specifically because the big banks were pulling out of a small community in southwestern Ontario. Nobody was going to be there to provide services, either to individuals or the small local businesses. As a result of a movement on the part of that local community, a new credit union was formed and is flourishing after several years of operation.

It is important to acknowledge those types of endeavours by the credit union movement at the same time this bill is passing through the House.

Again, it does not go far enough. I will not take up my full 20 minutes, but I want to make a few more points with regard to perhaps encouraging the government to look a little into the future at other programs and policies it might implement to facilitate the further development of the credit union movement, in particular, outside of the provinces of Quebec and British Columbia where they are already quite strong. However, in the rest of Canada, the maritimes and Ontario in particular, if endeavours were made and policies implemented, they might very well be able to duplicate the success and provide alternate services we so badly need in the financial services sector.

In that regard, I draw the attention of hon. members to one of the things the province of Quebec did to assist in expanding the caisse populaires and the Desjardins movement. It recognized the need for additional funds to be available to the movement and to be used in the community to foster local business and allow the development of smaller communities. It turned the pension funds traditionally controlled by the government over to the Desjardins movement. That put at its disposal a huge amount of additional liquidity.

Although one can argue that no system is perfect, it certainly had the effect of making that movement in that province very competitive with the big banks. Small and medium sized enterprises had alternatives. A financial service was available to get better services than they traditionally received from big banks.

I am aware of another area that could be considered in terms of enhancing the strength of the credit union movement. That has been to allow them to provide to their members insurance services such as home insurance, auto insurance and others. This has been done to some degree in the province of British Columbia. From my personal knowledge of the experience in British Columbia involving some very large institutions, they have been able to use the insurance financial service sector as a profit making centre, one that in the smaller credit unions and smaller branches has made them financially viable in small communities.

This allowed a small branch of a credit union to continue to function by providing all the other financial services such as mortgages, personal loans et cetera, as well as house and auto insurance. By combining the two, they were quite viable as an economic institution. They could service the community by providing all those financial services. This is something the government should look at as a way of providing some incentive, initiative and strengthening of the credit union movement across the country.

We recognize the resistance the government has in allowing banking institutions to deliver insurance services. The same need not be true for the credit union movement. The credit union movement is dedicated to its members and its communities, not just to the bottom line. The authority for credit unions to move into that area would be a boom for them and a very large plus for their communities.

In conclusion, it is obvious that the bill is going to pass with the form being proposed at this time. Some of the suggestions I made with regard to credit unions need to be pursued by the government. It is very important to Canada that an alternative source of funding for the financial sector be available to both small and large communities. Some of the proposals we made as a party and that I recounted today would take us somewhere down that route.

Business Of The HouseGovernment Orders

April 2nd, 2001 / 12:10 p.m.
See context

Liberal

Don Boudria Liberal Glengarry—Prescott—Russell, ON

Given the motion that has just passed and the unanimous consent, I would like to clarify the business of the House because it has been changed. In any case, there have been consultations about future business which I would like to share it with the House.

After completing the debate on Bill C-2 at report stage, the House will return to third reading of Bill C-8, the financial institutions bill. After this we will call Bill C-18, the equalization bill; Bill C-17, the innovation foundation; and Bill C-22, the income tax bill, in that order.

Tomorrow shall be an allotted day, as already announced.

Wednesday shall be the day allocated for third reading of Bill C-2. I understand there will be some co-operation to ensure that all parties have a spokesperson on Wednesday. I intend to do my part on this side of the House in that regard.

On Thursday we shall resume the list from today, adding at the end Bill C-9, the elections bill. We shall continue the list on Friday, adding Bill C-12, the Judges Act amendment.

Financial Consumer Agency Of Canada ActGovernment Orders

March 30th, 2001 / 1:20 p.m.
See context

Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Madam Speaker, I am both pleased and somewhat distressed to speak on the bill today. The reason I am distressed is that after a long week of sleep deprivation I am not my usual bubbly self. I am struggling with a sore throat and other things. I feel sorry for myself and I am sure the Speaker does too.

Today we are dealing with Bill C-8. I have estimated that to read the bill would take 15 hours. If one were to read it with meaning, in other words read it to understand what is going on and actually verify some of its claims, it would take many more hours.

It is a huge undertaking for us today to go through Bill C-8, an act to establish the Financial Consumer Agency of Canada. The bill would basically set up the way financial institutions in the country are run.

On balance I support the bill, although I definitely have concerns. Ever since 1992 when the then Conservative government changed the rules for banks, there has been a need for revisions and for our banking sector to, if I can use the phrase, get with the times and be able to compete in the international market.

In a sense the bill is much overdue. The government moved very slowly in that regard. To make matters worse, in June 2000, not quite a year ago, the government introduced Bill C-38 in first reading. The bill then sat there and the government basically did nothing about it. It did not call for a debate on the bill in the House. It was a very slow process.

Then, to our chagrin, there was a totally unnecessary election in the fall which caused a great number of bills to drop off the order paper. The bills were enveloped into nothingness with the call of the election. The election was called for only one purpose, and that was a political purpose. The business of the country and helping our financial institutions with a new bill took a secondary position to the Prime Minister's overriding goal of getting yet another mandate. That seems to be so important to the Liberals, hanging on to power.

In retrospect we see that it was a good strategy, politically speaking. It is very much in keeping with a cartoon I saw in which the Prime Minister is shown reading a newspaper that says “Liberals have overwhelming third majority government”. The Prime Minister is saying to the people reading the cartoon “That is the best $200 million of your money that I ever spent”.

It is incredible that the government could drop all the business of the country and hold an unnecessary election one and a half years early, an election which cost the taxpayer $200 million and was conducted strictly and totally for political reasons. The Prime Minister wanted to win and did not care what it cost.

This bill along with many others was dropped and has now been resumed. It is interesting that Bill C-38 became with a few technical changes Bill C-8. If I wanted to reluctantly compliment the government I would thank it for bringing the bill back to the House with some urgency and allowing us to debate the issues in it.

Previous speakers, including my colleague from Prince George—Bulkley Valley, have spent quite a bit of time talking about the structure that is involved. It comes under the broad topic of having a bank we can trust. I really think that is important.

From my life experience and from having been on the finance committee studying this bill and other issues, it is my view that Canada is richly blessed with a financial system that is strong and trustworthy in the big picture.

In other words, we do not have a great deal of fear about our banks collapsing or about financial transactions not being completed in a timely fashion. As a matter of fact, and I do not believe this should be addressed in legislation, we should have a website where people can post their complaints about the banks for everyone in the country to see, unfiltered by the press. That would give huge accountability to the banks.

As a member of parliament I receive complaints, not many but some, about the banks. It says something about our post office that these days I receive more complaints about the banks than about the post office. Neither type of complaint is huge in number, although some are of significance to the people who visit their members of parliament on an issue. However by and large our banks are trustworthy and we can count on them.

We have a banking system in which we can conduct financial transactions and know that everything will work clickety-clickety-click. It is all very smooth. It is a well structured organization. That is due to the combined efforts of the Bank of Canada, which has been well run during the last number of years, and the individual banks that have taken their responsibilities very seriously.

I have a question for the banks if any of them happen to be listening. If I get a cash advance on a Friday it is posted within two seconds, but if I make a payment on that same advance I do not get the credit until the next banking day. Sometimes it takes two days if it is a weekend. I wonder why that is.

The banks should be consistent. If I bring a cheque to the bank I know it has the capability of cashing it and doing the electronic transaction immediately.—

Financial Consumer Agency Of Canada ActGovernment Orders

March 30th, 2001 / 1:10 p.m.
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Bloc

Paul Crête Bloc Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC

Madam Speaker, I am happy that the hon. member for Matapédia—Matane is actually giving us a very specific example of the reality I was describing in my speech. Matane and Amqui are small towns, and when a number of jobs are lost because a bank branch is closed, there is a major impact. In a large city, this could translate into the loss of hundreds of jobs.

I think the solution was to be found partly in the proposal of the hon. member for Hochelaga—Maisonneuve. He wanted to ensure control of community reinvestment by banks. I believe this could have been an objective of this bill. It could have led to an interesting solution.

I also hope that Bill C-8 once passed will allow greater competition in the banking system, thus forcing banks to finally have more respect for their clients. I would also challenge people as shareholders, as bank clients, not to be afraid of making representations to see where their capital is going and how it is used, to really be actors more than spectators, in the development of the financial situation in their region.

Financial Consumer Agency Of Canada ActGovernment Orders

March 30th, 2001 / 12:50 p.m.
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Bloc

Paul Crête Bloc Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC

Madam Speaker, it is a great pleasure to take part today at third reading stage in the debate on Bill C-8, an act to establish the financial consumer agency of Canada and to amend certain acts in relation to financial institutions.

What we have before the House is a major piece of legislation concerning the overall structure of the banking system in Canada and all the operations of our financial institutions. This bill deserves our full attention. It is the result of a lot of hard work that started when the Minister of Finance announced the mandate and membership of the Task Force on the Future of the Canadian Financial Services Sector on December 18, 1996.

This bill is the result of an extensive consultation process. We finally have a bill we find acceptable after making significant representations and winning on a number of points concerning the implementation of the bill.

This bill deals with major issues such as the banking sector. It deals with changes to the rules governing bank ownership, with bank holding companies and with the whole issue of foreign banks. With globalization, deregulation and new developments, it was important to review the bill. This is what this legislation does in a major way.

However, the Bloc Quebecois had major concerns regarding the treatment of banks with assets of less than $5 billion. We have one of those in Quebec: the National Bank. It may not be the biggest bank in Canada but it is the biggest one in Quebec. We wanted to ensure it would be adequately protected under the act.

The first version of the bill, introduced before the election, contained no provisions to this effect. I believe our representations helped, since we were opposed to Bill C-8 which gave the Minister of Finance too much power over the future of banks. In the first bill, there was no guarantee that he would take into consideration the specificity of Quebec's financial system.

The member for Hochelaga—Maisonneuve rose to say that we wished there were in this bill important additional provisions allowing community reinvestment by the banks. The United States has such legislation, and it has yielded interesting results. We do not have this type of adjustment. People living in regions have seen in recent years a reduction of the number of bank branches. We have noticed that the services provided to customers, namely credit services, are not always those we should expect from a competitive system. We would have liked the bill to provide for greater competition.

After several representations, in particular by my colleague the member for Saint-Hyacinthe—Bagot, who kept a close eye on the federal government, the finance minister and the parliamentary secretary with respect to this issue, the government established guidelines on the reclassification of the banks previously listed in schedule I with an equity capital of less than $5 billion. This is the case of the National Bank.

We would have liked to see these guidelines in the bill. At least, they now exist. They have been published by the Department of Finance and will have to be taken into consideration when decisions are made about the ownership of this type of bank.

Under these guidelines, the Minister of Finance may reclassify such banks in restricted ownership categories. The guidelines set out the framework for the review of transactions requiring reclassification. A certain number of factors are identified, which will have to be taken into consideration by the minister when he has to make a decision following a transaction dealing with the ownership of a bank.

For example, the cost-effectiveness and objectives of the proposal would be analysed. Consideration would also be given to the impact of protecting the proposed transaction on the security and soundness of the bank, on direct and indirect employment, on the location of the centre of decision making and management of the bank, on the needs of consumers, on the business and activities of the bank and on the future prospects of the bank in world markets.

In other words, there are a series of criteria which will oblige the Minister of Finance to consider all these issues when making his decision. This means that the people working at the National Bank, its owners and shareholders, will have to ensure that these guidelines are observed because Quebecers want this bank to continue to serve Quebecers.

In the case of transactions the Minister of Finance will have to ask questions to determine whether there is sufficient protection for direct and indirect employment and where the bank's centre of decision making and management is located.

In this connection, I will digress for a moment. Our arguments have also contributed to a debate within the National Bank, which has adopted administrative rules to protect itself against a hostile takeover, a takeover not wanted by its shareholders. These people took a stand on this issue and on the issue of the bank's head office.

Thus, in this respect, not only through Bill C-8 but also through the way the bank has responded to adopt a responsible attitude, it now seems to us that the necessary protections are there to protect this type of bank and particularly the National Bank in Quebec.

One of the other major criteria that are particularly a cause for concern for me and that the minister will have to consider when he determines the value of the transaction, is the interests of Canadians and, when the institution is operating mainly in a region, the interests of the people in the region.

We know what the word region means to the federal government. Usually, it means Ontario, Quebec, western Canada or the Atlantic. In this regard, it will have to consider the interests of the people of Quebec, if ever there were a transaction relating to the National Bank.

We wish this had been included in the legislation, instead of being covered simply by guidelines, since we do not know who the finance minister will be in a few years. We do not know what pressure he will be under. We know the value and the strength of lobbies here in Ottawa, particularly in terms of our funding rules. This allows for very strong lobbies.

In the past, we have seen banks make very large contributions, especially to traditional parties. We hope that through these guidelines the bill, once enacted, will provide adequate protection to small and medium size banks within Canada.

As I said earlier, this is major legislation because it deals not only with the banks but also with all other financial institutions. As concerns the protection of savers and investors, this bill contains interesting features.

We have proposed many amendments but they have not been selected. I want to put them on the record so that people will know that the Bloc Quebecois took to heart the protection of their interests.

I will say a word later about community reinvestment. In the last parliament my colleague for Hochelaga—Maisonneuve introduced a bill on community reinvestment, and he also tried to have the content of his bill included in Bill C-8. Unfortunately, the government refused.

There is always room for improvement and I am sure my colleague, with his great tenacity, will find other ways to ensure that financial institutions assume their social responsibilities.

When I hear about the profits our banks make throughout Canada, I think we should look at what they do and see whether financial benefits in the regions where they operate are high enough. In the same vein, I think we should legislate in order to have the power to make an assessment of the situation and to require of the banks that they correct the problems, or perhaps establish criteria, a code of conduct or procedures that would go beyond what exists now.

Bank branches have disappeared year after year in my area. Having made a lot of money with our people for many years, when they do not meet the levels of profitability demanded by the shareholders, not because they are in deficit but because they are not meeting the levels of profitability anymore, the banks get rid of their staff, their facilities and their branches. This is always hard on the regions.

When we want to negotiate a loan for a small or medium size business at the regional level, it is always better to talk to somebody we know, somebody who understands our business. I do not think that we can say that we are really happy with the Canadian banking system in that respect.

Let me go back to the proposed amendments. For example, we suggested limiting the number of boards a director is allowed to sit on at any one time. The House certainly understands from the terms of this amendment that we want to ensure, in all logic, that power and financial decision making capacity is not excessively concentrated in the hands of a few.

We were also talking about an amendment on the suppression of potential conflicts of interests between board members and those who supply goods and services to the institution. This is also self-explanatory.

Amendments also provided for the requirement to submit financial statements for review and discussion during the annual shareholders' meeting. Hon. members know that the banks' small shareholders are more and more interested in having a say in decision making. They do not want to just sign proxy letters; they want to be able to influence decisions, even if they are only minority shareholders. We want them to be able to have a voice. The purpose of this amendment was to enhance their powers.

There was also talk of making shareholder presentations for approval of the officers' remuneration policy. This too is in line with the banks' social vocation. When we heard of inordinately high salaries being paid to people who may have generated substantial financial profits, but did so at the expense of the bank workers, with more than 1,000, 2,000 or 5,000 jobs cut to maximize profits, while officers were getting considerable salary increases, we figured it would be extremely appropriate to bring in an amendment. It did not make its way into the bill however. There was one but it was rejected. We feel it ought to have been part of this bill.

There was also talk of proposing a code of procedure for shareholders' meetings, a requirement for companies to make a full report of each and every shareholders' meeting to be sent to each shareholder, all with a view to improving the transparency of the banking system.

All of these amendments would have made this bill even better and given it more transparency. They were rejected, and the way it was done strikes us as improper. We do not question the pertinence of the bill, but the amendments would have made it possible to make the bill a more significant one.

I will say a bit more about community investment. It is based on the banks' social responsibility to the community. It is still not a part of C-8, despite the comments by the Bloc and, as I was saying earlier, the member for Hochelaga—Maisonneuve.

He proposed important objectives for the bill, including having the banks analyze their operations, their systems, their rules and their practices and measure the spread between deposits and loans to designated persons in a given community. This way one can see the economic impact a bank has on a community, its relevance, and assess whether it has fulfilled its social role and table a report on the remedial action to be taken. The superintendent of financial institutions should have been required to propose assessment criteria to promote implementation of the concept of community reinvestment.

This is therefore a positive contribution that could have been made to the bill but that the government rejected. It still seems relevant to us but unfortunately it was rejected.

I would like to remind members of something my colleague from Hochelaga—Maisonneuve said: “There are whole communities where banks are pointedly absent and, when they are present, there is a real problem of availability of banking services for low income individuals that only the passage of legislation will correct”.

I congratulate him on his very accurate view of what goes on throughout Quebec. The member for Hochelaga—Maisonneuve is from an urban centre, where the problem of people with limited incomes accessing banking services must certainly be an issue.

This quote shows as well that he is informed on the situation throughout Quebec, in the regions, and that a member from the Montreal area can be very much aware of the situation throughout Quebec. This quote reflects that. This is what I was saying earlier. In Quebec, the problem is often one of not finding bank branches any more.

We hope that Bill C-8 will at least solve the competition problem to provide for good competition and adequate services in our regions. However, it will not solve the issue of community reinvestment because the government refused to act on it.

In this regard, we could say that market forces do not support economic growth. The community is less competitive when there are community disinvestment.

In the end, a community where investment ceases to flow is a community where there is no capital movement. When capital movement slows down because banks invest the money from the checking and saving accounts of the people in other regions, the population of the affected community loses out.

Overall, the bill will change and update the banking system and all the other financial institutions. I think that it includes many positive aspects. It results from relatively broad consultations. We had major concerns regarding the protection of banks like the National Bank, but thanks to our pressing demands, the Minister of Finances produced guidelines to protect them.

Even though they are not included in the bill, these guidelines represent an improvement that will ensure an adequate level of protection. We also think that the banks themselves can take steps to improve the situation. However, we think that the government could have taken this opportunity to make the administration of banks and the functioning of boards of directors more transparent.

We are sorry that these amendments were rejected. We are also sorry that our amendments on community investment were not accepted. However, we believe that overall it is a good piece of legislation which deserves our support.

When proposed measures seem positive the Bloc Quebecois is happy to support them. In the last parliament I think that we, in the Bloc Quebecois, were the ones who most often supported the government when we deemed it appropriate to do so. We know how to address the real issues people are faced with in their everyday lives. When we disagree, we say so, hoping to find interesting solutions.

To end the week on a bill such as this one is a lot more interesting than the general attitude shown by the Liberal government this week. For example, we had to set the record straight on Thursday. During statements by members the member for Laval East said that we had not spoken about the vast police offensive against criminal biker gangs when the previous day, the same day the police operation was carried out, the member for Berthier—Montcalm had made a statement on that very subject.

It seems that the Liberal majority is not paying much attention to the debates, as evidenced by the fact that yesterday afternoon, throughout oral question period, the majority kept telling us that the opposition was not interested in the real issues, that its only concern was the Auberge Grand-Mère. Half an hour later, when the question was put on a motion, the Liberal majority was unable to find enough members to ensure continuation of House proceedings.

As far as I am concerned, this clearly demonstrates how irresponsible the Liberal majority is. We taught them a good lesson. Even from the opposition side, the Bloc Quebecois can address the real issues like the integrity of the Prime Minister. We are also able to consider any other problem coming our way, and we do so. We make representations. We make our points forcefully. We believe the House of Commons should be taken seriously, should hold real debates.

This is why I think we should conclude consideration of Bill C-8 this afternoon. It will give some sense to the House business. I hope Liberal members will go home this weekend and acknowledge that they made a serious mistake in believing that they could determine for the House of Commons what the important issues are. However, I think that the people of Quebec and of Canada need to be sure that their Prime Minister is honest but also that other problems are being dealt with. So I hope the Liberals have learned their lesson for the week.

Financial Consumer Agency Of Canada ActGovernment Orders

March 30th, 2001 / 12:40 p.m.
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Canadian Alliance

Dick Harris Canadian Alliance Prince George—Bulkley Valley, BC

Madam Speaker, I would like to ask the hon. member this question. I know he has looked at Bill C-8 quite extensively. He knows the government has been talking the talk about giving more flexibility to the credit union movement in Canada.

Would the hon. member give us his opinion on why the government voted down a very key amendment which would have provided this flexibility to credit unions in Canada in spite of the fact the government has talked about its wish to make this more flexible?

Financial Consumer Agency Of Canada ActGovernment Orders

March 30th, 2001 / 12:20 p.m.
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Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Madam Speaker, it is a pleasure to rise to speak to Bill C-8. The legislation will have a very important effect on the level and quality of services available to Canadians and consumers of financial services. It also has the potential for a significant impact on the competitiveness of our financial services sector globally.

We are in an increasingly competitive financial services sector that from a global perspective has become hyper competitive. The amount of change in the financial services sector in the last 10 years has been greater than the level of change that has occurred in the entire 150 years preceding that.

In this rapidly changing hyper competitive environment the government has dragged its feet since 1993. It has avoided making the necessary updates and improvements to reflect this reality and the new realities in the financial services sector. There is very little in the legislation that could not have been introduced in 1994-95. Instead, the government used every delaying mechanism at its disposal to wait as long as it possibly could to introduce the legislation, and that is unfortunate.

Further, the MacKay report of about a year and a half ago provided an extraordinarily comprehensive and well thought out long term visionary plan for the financial services sector that has been butchered by the government. It has selectively chosen based on political palatability certain elements of the MacKay task force to recommend.

It has chosen to ignore and to turn a blind eye to many of the other recommendations which may have been more politically contentious but would have contributed significantly to improved competitiveness in our financial services sector and to an improved environment to create more jobs and opportunities for Canadians in this sector.

The government has treated the MacKay task force like a buffet where it could selectively choose from the menu of public policy options. It chose the various options based on political criteria, not on economic criteria or on achieving what was best for Canadians and the financial services sector.

The government has delayed and dithered on this issue for a long period of time. It is with a pinched nose that the PC Party supports the legislation because it does not reflect the type of measures and policies that we believe would harness the power of the financial services sector in Canada. While it does have some of the elements that could help to improve the environment for the financial services sector and create greater levels of wealth and opportunity for Canadians, it does not go nearly far enough in many ways.

In 1993 Canada was ahead of the U.S. in terms of deregulating our financial services sector. Today we have fallen behind the U.S. With the last vestiges of the Glass-Steagall act gone from the U.S., American financial services, such as banks and trust companies, are better positioned to participate in the opportunities of the 21st century than their Canadian counterparts.

The government's approach to the financial services sector has forced Canadian banks to grow in the U.S. and to limit their growth here in Canada. This is unfortunate because many of the jobs and opportunities could be here in Canada. I fear that the government is driving people offshore and limiting opportunities within our borders.

There has been a significant amount of lost opportunities in the last couple of years. The last time the issue of bank mergers was pursued, the finance minister's response in December 1999 closed the door to bank mergers. There was an opportunity for dialogue between the banks and parliamentarians, and between the banks and people served by the banks about some of the issues of concern to Canadians.

Instead of the finance minister taking opportunity to address those concerns in a constructive way by sitting down with the banks and negotiating terms that would protect the interests of Canadian consumers, borrowers and small business people, he slammed the door shut for short term political reasons. He not only denied an opportunity for a more efficient financial services sector, he also denied Canadian consumers the opportunity to have better, more competitive services well into the future.

During that time, the Bank of Montreal and the Royal Bank agreed to several long term commitments which would have given improved services to consumers. These included doubling the amount of lending to small businesses and the setting up of a separate bank to do that, reducing bank service charges, protecting services to smaller communities and increasing staff in branches.

Instead of taking advantage of these opportunities on behalf of Canadians, the minister, for political reasons, made a shortsighted decision. Part of that was to appease the Liberal caucus witch hunt on banks—I am sorry—the Liberal task force on banks which constructed the most partisan, poorly written and researched, short term document ever in the history of parliament. Instead, he capitulated to the forces of evil on that side of the House with its short term, populist, pandering perspective which denied Canadians the long term opportunity of a stronger financial services sector and better levels of services to Canadians.

The Liberals opposite are convenient free marketeers. It is focus group economics on the other side of the House. It is whatever is popular this particular week, or month or year. There was a time when those members opposite campaigned vociferously against free trade until of course they were elected. At that point they saw the benefits of free trade and embraced it. Some would say the government claimed the invention of free trade in the same way that the former vice president of the U.S., Al Gore, claimed invention of the Internet. We also saw that with the GST.

It must be great to be able to go through life unburdened by the yoke of principle and consistency. Fortunately we on this side of the House are burdened with the yoke of consistency, principle and values that may not always be popular but are consistently well thought out and based on sound values.

This piece of legislation would give the Canadian government a greater level of intrusion and regulation of the financial services sector than any other sector or industry in the country. The government will say that this growth of regulations is good for consumers, but I would argue this would in the long term cost Canadian consumers more in the following ways.

First, Canadian bank service charges are competitive globally. None of us like to pay service charges but the fact is our bank service charges are competitive. In fact they are lower than those of American banks. Sometimes it does make sense for us in this place to deal with reality and not simply perceptions when we are voting public policy.

Second, this growth of regulation is going to cost a great deal for financial services players to participate in and to comply with. Ultimately those costs will be borne by someone. Will they be borne by shareholders? Perhaps they will in part. I would argue that ultimately those costs will be borne by consumers, the very people who the government is claiming to be trying to protect. Consumers will be paying higher service charges in order for the financial services institutions to comply with the government's egregious, oppressive levels of regulations in this particular area.

Financial Consumer Agency Of Canada ActGovernment Orders

March 30th, 2001 / 12:15 p.m.
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NDP

Dick Proctor NDP Palliser, SK

Madam Speaker, I will go on with my speech. This legislation will help credit unions, designate a financial services ombudsman, something the NDP has been asking for for a long time, and create a consumer protection agency, that is called the financial consumer agency. It will launch a consultation process whereby the banks could legally be forced to provide a low fee retail deposit account. This is a position we have held for a long time in the NDP; however, nothing will happen in the short term. The bill will formalize a process of collecting data on small business lending but will not expand the banks' business powers into the areas of auto leasing.

These are some of the positive things in the bill. There are also in the 900 pages many things with which we disagree. Among those negatives is the wide ownership rules which lead to the concentration of banking powers in the hands of very few individuals.

This provides too much power to the Minister of Finance. Unlike parliament, the minister would then have the final say in virtually every major change that dealt with financial institutions, including mergers, acquisitions, regulations and ownership levels. It also fails to provide a real framework of accountability between large financial institutions and their local communities.

There is no community reinvestment act similar to the one in the U.S. which works very well. There is no effective improvement in accessing basic banking services, especially in rural areas. There is no right to lifeline, no cost accounting and no effective way to stop bank branch closures. Banks are only required to provide a four to six month window of notice to close under the legislation.

There are no teeth for the independent banking ombudsman and it reduces requirements for small banks. The Office of the Superintendent of Financial Institutions has been given more powers to deal with the potential for increased risk in the system, but there is no guarantee that the OSFI would be able to use these powers effectively because of the complex structures introduced in the bill, for example bank holdings and new ownership regimes.

There is nothing on the control and regulation of high risk derivative products and off balance sheet liabilities or on new monetary policy tools for the Bank of Canada.

We have dealt with some of the positives and the negatives. We note as well that it is a highly complex 900 page omnibus bill which changes eight major financial industry acts and is probably the largest bill ever to come before a Canadian parliament. Its main thrust is to increase competition, foreign and domestic, and flexibility through deregulation and re-regulation.

The Minister of Finance is easing entry requirements in the financial services market. He is purporting to broaden the powers of financial institutions including credit unions, increasing the flexibility and the complexity of ownership regimes, and allowing access to the payment system by non-bank entities, for example insurance companies. The legislation also creates a financial consumer agency, an independent financial ombudsman.

Bill C-38, its predecessor, included cosmetic measures to improve access to basic banking services and guidelines for a bank merger review process which were made available with the bill but are not included in the current version of the legislation.

The New Democratic Party opposes the bill. We emphasize that there is some support, as I have indicated in my remarks. We support parts of the bill, including the modernization of financial services, expansion of powers to credit unions, a potentially better deal for consumers, a better competitive position for insurance companies, and status quo on the distribution of insurance and leasing.

We would support the bill at third reading stage if changes to the wide ownership rules were rescinded, if it provided for more power to the House of Commons to review megabank mergers and if the government adopted an effective framework of accountability among banks, their communities and fully regulated bank holding groups.

In conclusion, there is quasi-unanimity among major financial industry players to speed up the passage of the bill which has incorporated the majority of the MacKay recommendations and has virtually gone through an invisible committee of backroom lobbyists. Bill C-8 is a done deal which the government is selling as a progressive financial consumer package.

Financial Consumer Agency Of Canada ActGovernment Orders

March 30th, 2001 / 12:10 p.m.
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NDP

Dick Proctor NDP Palliser, SK

Madam Speaker, I am pleased to take part in the debate in the House today on financial sector reform. I want to indicate to the House that I have a time sharing arrangement with my colleague, the hon. member for Windsor—St. Clair.

Bill C-8 is really a reincarnation of a bill that was introduced in the last parliament and died on the order paper following second reading. It purports to implement 57 measures contained in the June 1999 finance policy paper entitled “Reforming Canada's Financial Services Sector—A Framework for the Future”.

The paper was the finance minister's response to an extensive and expensive two year consultation by the MacKay task force on reforming Canada's financial services sector. The consultation culminated in the fall of 1998 with a report entitled “Change, Challenge and Opportunity”. There was a subsequent response by the Standing Committee on Finance.

One of the positive aspects of this bill is that it expands the access to the payments system, which is one of our long held positions in the NDP. This is a measure that increases competition by allowing insurance companies to offer chequing and saving accounts and helps credit unions compete by allowing the creation of a single national entity—

Financial Consumer Agency Of Canada ActGovernment Orders

March 30th, 2001 / 10:55 a.m.
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The Speaker

Different members' views of the facts, sometimes of the same facts, are seen through different eyes or maybe different glasses. However the hon. member for Prince George—Bulkley Valley has the floor, and if he kept his remarks more directly relevant to Bill C-8 perhaps there would be less controversy.

Financial Consumer Agency Of Canada ActGovernment Orders

March 30th, 2001 / 10:45 a.m.
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Canadian Alliance

Dick Harris Canadian Alliance Prince George—Bulkley Valley, BC

Mr. Speaker, there is a direct parallel here. I was comparing the way the government treats farmers to the way it treats financial institutions. The government feels that the way it treats our financial institutions is important, and I agree. However it has forgotten about farmers. It has forgotten about how its lack of interest has affected our farmers. It has no shame.

We are happy that the government has put forward legislation to allow banks to develop their holding company structures. That will be progressive. We are also happy that we have a competitive, thriving and vibrant insurance industry in Canada. We are happy that the government has seen the wisdom of disallowing banks from retailing insurance products through their branches. That day may come, but the insurance industry now has a five year window to prepare for any impact it might cause.

Alliance members also know there is a competitive, vibrant auto leasing industry in Canada. We know that Canadian consumers who are considering buying automobiles can get leasing from a number of different areas, in some cases down to 0.9%, 0.19%.

We are happy that the government has seen the wisdom of telling banks they cannot retail auto lease products in Canada, and that it recognizes the great deal for consumers that now exists in the auto leasing business.

In order to keep down the actuarial risk in auto leasing there must be good risks to offset people who are not such good risks. Overall, one can keep lease rates down and recognize that the automobile companies, which produce automobiles and have subsidiaries like GMAC, Ford Credit or Chrysler Credit, have an interest in selling automobiles. All that seems to work together pretty well to keep interest rates down when it comes to leasing.

It is a conflict when we see the government doing something pretty good that we can support and then doing all the other things that it does. It makes us wonder who is in charge over there. We can draw many examples. I can draw one in my own riding.

Bill C-8 is as very progressive bill. It will allow one of the pillars of our economy to be more competitive globally. That is a good thing.

Members must ask the question: If the government can put through a bill like this, how can it be so neglectful of other important issues? In my riding of Prince George—Bulkley Valley, in Burns Lake, B.C., there is the Burns Lake Indian Band. The band has had an agreement for the last number of years in which the village of Burns Lake, which parallels the band, provides water and sewer facilities to the band. For the last seven and a half years the band has decided that for some reason it would stop paying taxes.

The village of Burns Lake has a very small tax base and to lose $150,000 a year in taxes has a big impact. The federal government would not want to lose tax dollars either, as evidenced by the paltry tax cuts it has given Canadians. However, I digress a bit.

All of a sudden, after seven years of non-payment of taxes, the village of Burns Lake said it would cut off the band's water, sewer and other services because it was not paying its bill. Hon. members would think the department of Indian affairs would be concerned about this and try to make up the back taxes and get the thing rolling again. The shutoff date for the band's water, sewer, fire protection and emergency services is April 30, 2001.

The mayor of Burns Lake and his officials were here a few weeks ago and I met with them and the minister of Indian affairs. We said that the issue was a problem and we agreed to get an independent negotiator to work it out and—

Financial Consumer Agency Of Canada ActGovernment Orders

March 30th, 2001 / 10:45 a.m.
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Liberal

Roy Cullen Liberal Etobicoke North, ON

Mr. Speaker, I rise on a point of order. I do not like to interrupt the hon. member for Prince George—Bulkley Valley, but I would like to know the relevance of what he is speaking about. When we started this debate we were discussing Bill C-8.

Financial Consumer Agency Of Canada ActGovernment Orders

March 30th, 2001 / 10:35 a.m.
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Canadian Alliance

Dick Harris Canadian Alliance Prince George—Bulkley Valley, BC

Yes, as my hon. colleague just said, a master-servant relationship. That is simply not acceptable to the official opposition nor to the other opposition parties. We have since 1993 demanded that the government be open and transparent. When the parliamentary secretary talks about the openness and transparency in the bill, here is one area in which he may be a stranger to the actuality of the relationship.

The government voted against the amendment which would have allowed that openness and transparency.

The parliamentary secretary also made a statement saying that it was the wish of the government, and it is in Bill C-8, that it would lighten the regulatory burden wherever it could.

I refer to another amendment that the official opposition put forward with regard to the payment system. The members of the payment system said very clearly that they knew there were a set of regulations and that they wanted to comply with them, but that in the course of doing business, they now and again need to make some rule changes to streamline their business in order to give better customer service to the people using the system. They said that their association wants to use the most unobtrusive method within a framework. They asked, through the Canadian Alliance, for the Minister of Finance to lay out a very clear and transparent framework under which they could operate, one that would be self-regulating and allow enough flexibility that they would not have to report every single rule change as it occurred. Having to do that is a regulatory burden that is unnecessary.

They wanted a clear and defined framework under which they could operate, which is what is in the amendment, but the Liberal government, despite wanting to lighten the regulatory burden however it could, voted that amendment down.

My last point about the amendments that we put forward deals with a statement made by the parliamentary secretary. He said “Credit unions must have the flexibility to compete and thrive at home and abroad”. How coincidental. Credit Union Central and members of its association want to have the flexibility to compete and thrive at home and abroad but it was not provided for in Bill C-8. We knew how important that was to Credit Union Central so we put forward an amendment respecting its wishes.

For a government that believes that credit unions must have the flexibility to compete and thrive at home and abroad, as the parliamentary secretary said, it voted against that amendment.

These are three distinct areas where the government is saying one thing yet doing another. Far be it for the government to say one thing yet do another. I am hesitant to bring up the red book wherein it promised to scrap, kill and get rid of the GST.

I will draw a comparison. During the election the Liberals went door to door, doorstep to doorstep, and over fences into backyards. They went to public meetings, to little restaurants and coffee shops, and said that they hated the GST. They hated it since the Tory government brought it in, and to show how much they hated it, they said that if they were elected they would kill that nasty GST. I know you would have been re-elected in any case, Mr. Speaker, because those are words that you never uttered.

Unfortunately the majority of Canadians believed that promise to kill, scrap and abolish the GST and elected a Liberal government in 1993. To their great surprise, the GST was neither scrapped, killed nor abolished. There was a name change, though, in Atlantic Canada where it is now blended and called HST. I am comparing that to the Liberals' continuing readiness to say one thing yet do another.

In those three areas the parliamentary secretary has been caught up in his own words because the bill does not reflect some of the things he said. We now have a bill that will give banks and financial institutions an opportunity to become more competitive at home and abroad. It will give them an opportunity to become more efficient and flexible in their operations, with the exception of the areas I outlined in the amendments the Liberal government voted against. These were amendments members of the financial sector wanted put through, but they were voted down.

Overall the bill would allow banks and financial institutions to become more competitive, particularly in the global economy. Due to the Liberal government's inaction over eight years, financial institutions have lost ground in the global economy. Their competitive position has gone down, so I am sure they will welcome the bill.

While the financial services sector will have this progressive bill to allow it to become more competitive, one wonders why the Liberals have not addressed some other issues that equally need to be recognized as areas where we are lagging behind.

As was reported in the news last night, the outdated medical equipment in our hospitals needs to be recognized. There is even talk about health dangers because some of the medical equipment is old, outdated, and possibly becoming a danger to patients who use it.

The government embarked on many new spending programs such as: the millennium project, fountains, golf courses and any kind of vote buying scheme that it could come up with. It has increased spending every year on brand new programs. It has raised taxes every year in the neighbourhood of $3 billion to $7 billion.

Yet there are areas of our country that are suffering because the Liberals have not considered them important enough to make them progressive, as they have finally done with Bill C-8 for banks and financial institutions.

I bring to the attention of the House the trouble farmers have when they go to financial institutions to apply for financing. Almost every farmer in Canada has either tried to get financing or is considering doing so and is not able to. They cannot do so because their farms are at risk, and their farms are at risk because of the government's refusal to help them compete with our American neighbours. U.S. farmers receive all kinds of subsidies and assistance because their government recognizes the important role agriculture plays in the United States.

Our government has refused to recognize Canada's agricultural industry to the same extent that our biggest trading partner does with its farmers. As a result, we are just an imaginary border away. American agricultural products come into Canada and sell at lower prices than we can produce them at in Canada. This is because the government has failed to recognize the importance of agriculture. It has failed to recognize the great disadvantage our farmers have when competing with our trading partners in the United States and abroad.

Financial Consumer Agency Of Canada ActGovernment Orders

March 30th, 2001 / 10:25 a.m.
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Canadian Alliance

Dick Harris Canadian Alliance Prince George—Bulkley Valley, BC

Mr. Speaker, once again let me say how gratifying it is to see so many government members in the House. We have important business to discuss today, as we did yesterday when the ranks were a little thin on the government side.

Members from all opposition parties attempted to discuss important issues, such as the Shawinigate affair and the issue of the junior minister of multiculturalism, issues for which the Canadian people demand answers, and there was an absence of response in the House, to put it kindly.

I am happy to be here on a Friday to discuss government business, such as Bill C-8. I know you were waiting for me to get back to that, Mr. Speaker. I wish government members, including some of the cabinet ministers and the Prime Minister, took their roles as seriously as we in the opposition take our roles.

I listened to the presentation made by Parliament Secretary to the Minister of Finance earlier. The Alliance Party will support the bill because it would bring Canada's financial institutions to a more progressive level.

As we know, since the government took office in 1993 precious little, if anything, was done to put Canada further ahead as a progressive financial institution country despite calls from the official opposition in the 36th parliament. We have stayed on par with countries such as Mexico.

It has taken the government seven and a half long years to realize that one of the most important sectors and pillars of our economy is the financial institution sector which includes banks, insurance companies, securities companies and credit unions. The progressiveness of this pillar of our economy was lagging behind all our global competitors, placing our institutions at a severe competitive disadvantage. Why it took the government so long one can only guess, but given its record over the past eight years I suppose it was the status quo.

The Parliamentary Secretary to the Minister of Finance said a number of things with which we agree. However he did talk about some things that left us rather confused, considering the motions in amendment that were put by the official opposition and that were voted down at report stage.

I will deal with statements made by the parliamentary secretary and the Prime Minister, as well as those made by his colleagues, indicating that the government wants to run its business in a very open and transparent fashion so that Canadians, the official opposition and other opposition parties can judge how it is doing.

What the government did in reference to our amendment was ask that the financial consumer agency report to the Standing Committee on Finance on a permanent basis. The committee is part of parliament, which includes all opposition parties and government members. That is openness and transparency. Yet in the bill it says that the agency would report to parliament through the Minister of Finance.

Anyone who knows me knows that I am not cynical when it comes to the government. What that may mean, though, is that the Minister of Finance would allow only what he wants to report to parliament out of the reports he gets from the financial consumer agency. When it comes to Liberal governments, and the door is opened to allow them to withhold certain information that they do not want to be made public, we have seen time and time again that they have taken every advantage of that opening.

A case in point is the current Shawinigate affair. The ethics counsellor, who is supposed to be the watchdog of how cabinet conducts its public and private business, reports directly to the Prime Minister, the very person who appointed him to the job; in other words his boss.

There have been enough questions raised about this relationship. The question of the year and maybe of the century is why would Canadians and opposition members sit by when there are questions about how the Prime Minister has conducted his private business and his so-called blind trust.

Time and time again the Prime Minister has stood up and said that the ethics commissioner, the guy that he hired and that he authorized in that position, says that he is okay and that everything was above board.

This is the same situation we have with the financial consumer agency where it reports directly to the very person who will be appointing them to that position. There is a bit of a perceived conflict of interest.

Financial Consumer Agency Of Canada ActGovernment Orders

March 30th, 2001 / 10 a.m.
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Etobicoke North Ontario

Liberal

Roy Cullen LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, I am pleased to be here in this crowded House to take part in the third reading debate on Bill C-8, an act to establish the financial consumer agency of Canada and to amend certain acts in relation to financial institutions.

I think we can all agree that the financial services sector plays a critical role in the Canadian economy. It underpins all other sectors in the economy by providing the means to channel savings into investment, resulting in economic growth and wealth creation.

The role the financial institutions play in the life of Canadians is equally important. In fact, these institutions protect Canadians' assets well and meet the needs of consumers and businesses as far as major financing, purchases and investments are concerned.

Let us not forget that half of Canadians are shareholders of our financial institutions, either directly or indirectly, so this represents an important source of revenue for Canadians now and in the future.

As legislators, we have an important responsibility to encourage the health of this sector. According to 1999 Statistics Canada data, 863,000 Canadians were employed in the financial services sector, including finance, insurance, real estate and leasing.

Canada's federal financial institutions operate within a legislative and regulatory framework defined by parliament. These legislative acts require the government to periodically review this framework and to bring before parliament any amendments needed to ensure that it remains current and relevant.

I would like to call the attention of the House to the four fundamental principles that underpin the legislation and which guided the government's decision making on the specific measures in the policy paper “Reforming Canada's Financial Services Sector”. It was released to the public on June 25, 1999, as the government's response to the MacKay task force report.

The first principle is that banks, trust companies, credit unions, insurance companies and other financial institutions must have the flexibility to adapt to the changing marketplace and to compete and thrive, both at home and abroad. Upholding this principle is necessary if the financial sector is to maintain its contribution to economic growth and job creation in the face of increasing globalization and rapidly changing technology.

To this end the bill provides additional flexibility for banks and insurance companies to organize themselves under a new holding company option that would be available to them, thus permitting them to explore opportunities to improve efficiency and grow their businesses by reducing the regulatory burden, among other things.

Similarly, we are raising the limits on widely held ownership of financial institutions in order to permit the exchange of considerable shares which is required for the conclusion of strategic alliances and joint ventures. This important business strategy is becoming increasingly common in other industries and ought also to be available to Canada's financial institutions.

The bill substantially expands permitted investments for financial institutions and makes these available to both the holding company and the parent subsidiary structures.

The second principle guiding the bill stresses the importance of competition. Specifically, we believe that vibrant competition in the financial services sector is necessary to allow consumers and businesses alike to benefit from a wide range of choice at the best possible price. With this objective in mind, the government is acting to remove unnecessary barriers for a bank start-up. We want to encourage new entrants. To that end, we are lowering the minimum amount of capital required to start a bank to $5 million from $10 million.

We are also proposing a new three tier, size based ownership regime that allows for the single ownership of small banks.

Banks with equity of $1 billion to $5 billion are also allowed to be widely held, provided at least 35% of shares are widely distributed among the public. There will, however, be no restrictions on the ownership structure of small banks with equity of less than $1 billion. These measures will make it possible to increase competitivity in the banking sector and to encourage new players.

Large banks with more than $5 billion in equity would continue to be widely held. Furthermore, commercial enterprises would also be allowed to establish new banks. This may be potentially attractive to retail companies that already have a network of stores or outlets.

The bill also includes measures to strengthen credit unions and caisses populaires. It contains measures that could accommodate their plans to restructure themselves in a way that reduces structural fragmentation and increases efficiency. It also provides the government with the regulatory flexibility to respond to new initiatives that may be forthcoming from the movement. The end result could be a stronger and more competitive credit union movement in Canada, better placed to challenge other financial service providers across the land.

We also propose to open up the Canadian payments system to life insurance companies, securities dealers and money market mutual funds. We believe that a broader range of participants in the payments system would foster competition because these firms would be able to offer services akin to chequing accounts.

Moreover, we will implement measures to align access rules for foreign banks in Canada with those governing domestic banks, so as to provide greater flexibility to foreign banks that wish to settle in Canada.

All in all, these measures will promote competition in the financial services sector, thus contributing to ensuring that Canadians get the best possible deal from suppliers of financial services.

I know the House is interested in the third guiding principle underpinning this legislation and that is to empower and protect consumers of financial services.

To that end, this bill would provide better access to basic services. It would allow us to specify in regulation what are reasonable identification requirements for an individual to open a bank account. The legislation also would provide regulation making authority regarding the provision of a low cost account and would oblige banks to follow a fair and reasonable process if they decide to close a branch.

As for low fee retail deposit accounts, memoranda of understanding have already been signed by the eight largest banks. While such accounts may vary from bank to bank, they must all comply with standards that will allow us to ensure that all Canadians have access to an account at an affordable price.

The bill would also establish two new organizations to promote and safeguard consumer interests in the financial sector. The Financial Consumer Agency of Canada, or FCAC, would consolidate related functions currently housed in Finance Canada, Industry Canada and OSFI. This agency would uphold the consumer protection provisions of our financial institution statutes, monitor institutions' compliance with their pledges to self-regulate, and provide consumer information and promote consumer education about financial services.

The government would also work with financial institutions to launch the new Canadian financial services ombudsman. This office would provide an independent, objective and impartial third party who would review complaints from individual consumers and small business owners who believe that their financial institution has treated them unfairly and have not been able to resolve these matters with the management of the financial institution.

However, we are also mindful that regulations are not without cause, which brings me to the fourth and final guiding principle underlying this bill.

We believe that our government should initiate improvements to the safety and soundness of the sector, but we should also take every opportunity to lighten the regulatory burden when we can. Bill C-8 would do just that.

The bill before us today seeks to implement a streamlined approval system for numerous operations that must be approved by the superintendent.

We are also proposing to improve the payments system, to ensure that the public participates more fully in the decision making process, and to ensure that the standards, regulations and rules of the CPA reflect the public interest.

The bill would also enhance the powers of the Superintendent of Financial Institutions to deal with firms that do not meet the regulatory requirements. It would also bolster the superintendent's power to intervene in the affairs of a financial institution that is heading for trouble. This would ensure that the prudential safeguards for the financial system are consistent with the new reality of stronger competition which we are trying to bring about.

In conclusion, the measures embodied in the bill we are debating today uphold and advance all four of the guiding principles I have just enumerated.

Canada's financial sector has an excellent reputation. Our financial institutions are extremely successful, both at home and abroad. To retain this excellent reputation and to keep our financial institutions strong, we need this new policy framework, a framework for the future. We need it because it recognizes the change around us, it permits our financial institutions to seize new opportunities and it manages change for the benefit of all Canadians.

I would like to thank the members of the finance committee and the hon. members of the House for being very supportive of this bill. I firmly believe that the measures proposed in this legislation provide an important framework whereby we can move forward together.

Financial Consumer Agency Of Canada ActGovernment Orders

March 30th, 2001 / 10 a.m.
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Brant Ontario

Liberal

Jane Stewart Liberalfor the Minister of Finance

moved that Bill C-8, an act to establish the Financial Consumer Agency of Canada and to amend certain acts in relation to financial institutions, be read the third time and passed.

Business Of The HouseOral Question Period

March 29th, 2001 / 3 p.m.
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Glengarry—Prescott—Russell Ontario

Liberal

Don Boudria LiberalLeader of the Government in the House of Commons

Mr. Speaker, this afternoon we will continue consideration of Bill C-2, the employment insurance bill. We will then return to the second reading of Bill C-18, the equalization bill. That will be followed by Bill C-17 respecting the innovation foundation.

On Friday we will consider third reading of Bill C-8, the financial institution, and if necessary we will return to Bill C-18.

On Monday, we will return to Bill C-2. If it is completed at report stage, we will return to Bill C-18, C-17 or C-22 on the Income Tax Act, depending on which of these bills requires further consideration.

Tuesday shall be an allotted day, and I believe it is the Canadian Alliance's turn. On Wednesday, we will return to Bill C-2. We will also try to complete third reading of Bill C-12, the Judges Act amendments, and Bill C-9, the elections bill. If we have the time, I will also suggest completing Bill C-4, respecting the Sustainable Development Foundation, before adjourning for Easter.

Financial Consumer Agency ActGovernment Orders

March 28th, 2001 / 5:30 p.m.
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The Acting Speaker (Mr. Bélair)

It being 5.30 p.m., pursuant to order made on Tuesday, March 27, the House will now proceed to the taking of the deferred recorded divisions on the report stage of Bill C-8.

Call in the members.

Before the taking of the vote:

Income Tax Amendments Act, 2000Government Orders

March 27th, 2001 / 4:30 p.m.
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Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Mr. Speaker, I am very pleased to speak in the debate. The Liberal government is getting slack. This morning we debated a bill which was over 900 pages in length. This little itty-bitty bill of 500 pages now seems like child's play in comparison. My party will have a look at it. We are debating it for the first time today, so the debate is on general principles. After this it will go to the finance committee where some of the details will be dealt with.

The whole study of taxation is intriguing in the academic sense. We have come to accept a level of taxation that is on the verge of being obscene.

I have told this story in the House before, and if any members recall it, my apologies, but it is very important. About three or four years ago I gave one of those one minute members' statements. I told the Speaker about a tragedy we had in our home. A guy came to the house. He backed his truck up to the door and proceeded to move everything out that we had accumulated over the years. He took half of our sofa set. He looked upstairs and saw four beds and he took two. He cut my beautiful old grandfather clock in half and took half of it and put it in the truck. I phoned the police before they took all the phones and asked them to get over to my place. I told them that we were being robbed. The police said that I should give them more details. I did and they said that they could not come and that they could not help. As a matter of fact the police did show up a little later and they insisted that I help the guy load.

This is an absurd story, but this is what happens every year to average Canadians. One half of our earnings are taken from us through the various levels of taxation from the federal, provincial and municipal governments. Tax freedom day in most provinces is around July 1, which says that half of our income is confiscated every year. If we do not help the guy who is owed and if we do not deliver the money that we have earned, we are held in contempt and can go to jail.

I do not want to characterize the levels of government as though they are crooks, yet I know I am right on the verge. I do not want to say that, so I will not. They are not really stealing our money because it is taxation. However it is still money I have earned that I cannot use for my family. I have very few needs. We can see that all I need is a square meal a day, or two, some basic clothing and basic shelter. Give me a bicycle to ride or preferably a motorcycle. My needs are simple and I simply want the best. I do not have many needs.

However I do have a great need to provide for my family. Fortunately my children are now grown up and on their own so things are a little easier. Now I only have a very expensive wife to provide for. When the children were younger I was teaching at a technical institute. All hon. members probably know this. I worked there for 27 years. We also made the decision that mother would be a full time mom. The children needed to have someone there when they came home from school to care for them and to show them that they were important.

In order to supplement our income, which even back then was not quite adequate to meet all our needs, including paying the mortgage, the utilities and everything, the decision was made that I would teach part time in the evenings. I taught a night class almost always two nights a week. This was way back and it dates me. Hon. members can tell by my grey hair that I am an old guy. I used to say that I worked Tuesday nights for Trudeau and Thursday nights for my family. It was a 50:50 deal.

Even though we are dealing with Bill C-22 to amend the Income Tax Act, the question that is not being addressed is the overall huge load of taxation which burdens our families and burdens individuals.

I have also indicated recently, and I will repeat this because I feel it is important, that my family and I not only pay our taxes but we also believe in charity. Due to the fact that we needed to look after our future, and as we have always felt insecure about the inadequate provisions of the government, namely the Canada pension plan, we have tried to put a bit of money into RRSPs. We ended up living on about 30% of my income as 70% of it was gone: 50% to taxation; 10% to charity, plus or minus a bit; and 10% to future savings, usually a little less because I could not afford that much. It was a struggle.

That is one of the reasons I became a member of parliament. In 1988, when the Reform Party was just starting, I picked up one of its brochures and all these things attracted me: the elected Senate, true democratic responsibility, and a justice system that would work on behalf of law-abiding citizens. However the one that really struck me was the belief that governments should live within their means so that we could reduce and not increase the debt. That was during the Conservative years when the debt was going up by $25 billion, $30 billion and peaking at $40 billion a year, just before they were finally turfed. That was one of the reasons they were turfed.

I was attracted to the principle that said we should have a balanced budget so that we would no longer increase the debt, the principle that we should start paying the debt down so that we could relieve ourselves of the necessity of interest payments and thereby have more money available to governments for programs that citizens value.

I guess the rest is history. We came here in huge numbers in 1993. When I first joined the Reform Party I did not anticipate that I would be transposed from my career at NAIT's teaching mathematics, computing and interesting things like that into trying to persuade a Liberal government to reduce taxes, balance the budget, hopefully pay down the debt and reduce interest payments.

However I stand here proudly this afternoon when I see what has happened in the last seven years. We have been the beneficiaries of a very robust economy in the United States which has a huge influence on our economy. That is undeniable. At the same time I believe it was our presence here which made it respectable to talk about fiscal prudence and to reduce the amount we were spending. The government was also able to exercise, with our help, a little discipline in not spending all the additional revenue that came rolling in that was beyond its expectations and certainly beyond its planning.

I like what happened in the year 2000. I am a little disappointed in the election. I wish we would have the Liberals in opposition. That would have been a lot more fun. One of the things which did happen just four days before the election was we had a mini-budget, the primary election document for the Liberals. That is what the bill is about.

I must give the Liberals a grudging commendation here. They sure do know how to run elections. I saw a cartoon of the Prime Minister right after the election. It showed the increase in the number of seats. He was reading a paper that said “Liberals re-elected with a resounding majority”. The Prime Minister, speaking to Canadian taxpayers, was saying that was the best $200 million of taxpayer money he ever spent.

We know that an election costs around $200 million. It is quite an expensive project. That is what it took to put the Liberals back into power. I am giving the Liberals a weak commendation in that their pre-election document showed they were ready to go the way we were saying Canadians were asking parliament to go, namely to exercise some fiscal responsibility and implement tax cuts.

If we look at the polling data right now and if we ask Canadians what they think is important, the number one issue is health care, and rightly so. Whenever we are ill and we need some help from the medical profession, we live in a country where we have come to accept that it will be available. It ought to be that way. I believe very solidly in our principle, which is also a principle of the Canada Health Act, that no one should be denied needed health care because of financial situation. I concur with that.

Canadians are saying that is the number one issue. The number two issue is either crime, punishment or the justice system. Down the line a bit comes tax cuts, as the member from the CCF said just a moment ago. He usually calls my party by the wrong name, so why can I not?

He said that tax cuts were actually quite low. That is because when Canadians are asked to priorize something they put these things in rank order. We make the mistake of drawing the conclusion, because tax cuts are maybe third, fourth or fifth on the list, that they are not important to Canadians.

If we look at the importance that Canadians place on those issues they would probably all be close to equal. If we asked how important health care was on a scale of one to ten, a person might say ten. When asked how important tax cuts are, they might say that is a nine. It is not as important so it ranks out that way, but it is still important to them. I hear that from many people who ask why they work like slaves from early morning until late at night and do not seem to get ahead.

Very frankly, even with these timid tax cuts that the Minister of Finance introduced in budget 2000—and of course most of the things in the mini budget from last fall have not yet been implemented—the actual reduction in the total deductions in the average person's paycheque is not huge, if it is there at all. As a matter of fact, with the new payments for Canada pension the bottom line for most families is about the same or sometimes even a little worse.

In broad generalities as I am leading up to my talk on Bill C-22 today, I really think we need to address very carefully the level of taxation in the country.

Second, I want to talk a little about the complexity of it. I talked a bit this morning on Bill C-8, the banking bill, but we have had other bills in the House that have to do with changing the taxation system or the revenue system, and sometimes we deal with government expenditures. I find it frankly astounding, and I hope I never lose my astonishment, that a week ago in one evening we sat here as members and in a matter of about 20 minutes approved the expenditure of some $15 billion or $16 billion. Those were the supplementary estimates just to get the government to the end of this fiscal year. The amount of money we approve here is amazing. I believe the responsibility we have as proper stewards of the money entrusted to us is of the utmost importance.

One of the things I want to see happen is a reduction in the complexity of our tax system. My goodness, I remember not long ago reading an interpretation bulletin on the GST which differentiated between buying cooked shrimp and cold, frozen shrimp. There is a different rate of GST applied to the two of them. In one case it was considered that because they were cooked they were a meal and therefore the GST applied. In the other case they were frozen, therefore they were groceries. GST is not charged on groceries. That is only one minute example.

Bill C-22 discusses proposals for amending the Income Tax Act as well as the Canada Pension Plan, the Customs Act, the Excise Tax Act, the Modernization of Benefits and Obligations Act and another act related to the Excise Tax Act. All of this is included and does not increase the simplicity of it. It increases the complexity of it.

Already I am led to believe that there are very few Canadians, even among our best tax lawyers, who know that code. As a matter of fact, any of our citizens who have had the occasion to go to one of the tribunals to get a ruling on a tax dispute are hoping for some reasonable hearing there because, depending on who one gets, one gets different interpretations.

One person in my riding told me that he phoned Revenue Canada to ask about a certain issue. He got an answer that he did not think was right, so he phoned again, got a different person and got a different answer. Then he thought, just a minute, there are two different answers here, so he went for two out of three because he still did not really know. He phoned again, hoping that he would get one of the other two answers, and lo and behold, there was a third answer. The complexity of it is a great frustration. The bill, among other things, increases that complexity.

During the election campaign the Alliance Party was proposing that we go to a single rate tax. That is not a flat tax. That is a misnomer we are often accused of. A single rate tax is simply the same kind of a tax system we have now with basic exemptions and other deductions, but instead of three rates as we had at that time, we said we would reduce them all to the same rate of 17%. I suppose we could have achieved the same result by simply saying that the amounts where these rates kick in are some high number and it would have probably been more saleable than the way it was presented.

The fact is that we are proposing deductions. We are proposing huge tax breaks for middle income and lower income families. The Liberals are crowing about the fact that people who are now making a family income of $20,000 a year are going to get a tax break of maybe 16% or 20% or whatever number it is that they use. Under our plan that reduction would be 100%. They would be removed from the tax roll completely.

Under our plan, a family of four, a mum, a dad and two kids, would pay zero tax on the first $26,000 of income and then a straight 17% on the remaining, whereas the Liberal government goes on and on with exemptions of maybe $15,000 or $16,000 and then 17% on everything after that, although they are proposing to reduce that to 16%. That, by the way, is also a bit of sleight of hand. If we just talk about the rate but apply it on more of the income the total tax bill is higher than if there were a 1% higher rate but a great deal more of the income exempt from tax.

In wrapping up, I would simply like to say that some of the measures in the bill go in the right direction. I am rather concerned about some of them. They go in the right direction but not far enough. In any case, there are some things in the bill that are woefully inadequate. I am looking forward very much to hearing about the bill in committee, not only from officials but also from witnesses who will come to our committee and give us their read on it. I am sure that in the finance committee we will have a great time analyzing the bill and reporting back to the House in due time.

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 12:25 p.m.
See context

Bloc

Pauline Picard Bloc Drummond, QC

As I said, our proposal dealt with limiting the number of boards on which a director can sit at the same time.

We were saying that, right now, what exists is the old boys' club rule where “I appoint you, you appoint me and we appoint one another”, which makes boards of directors increasingly less efficient and less representative of shareholders. We believe that the number of boards of directors on which a person is allowed to sit should be very limited, because one needs time and a minimum of dedication to do a good job. The bill completely ignores those recommendations.

Second, there is the elimination of potential conflicts of interests between board members and those who provide goods and services to the institution. Our proposal dealt with the elimination of potential conflicts of interests between board members and service providers.

Bill C-8 contains no provision to that effect, except the general provision on very general conflicts of interests. As we know, in the United States and even in Canada, there has been some success in getting shareholders meetings to pass, often against the will and recommendations of bank managers and other corporate directors, resolutions making it a requirement to disclose at least the fees paid to external auditors for audit services, on the one hand, and general consulting services, on the other hand.

For example, a consultant who is paid $1 million to audit records, while at the same time being paid $10 million for various consulting services could presumably have some difficulty presenting a critical internal audit report. Everyone understands that.

Third, there is the requirement to submit financial statements for review and discussion during the annual shareholders' meeting. That proposal seeks to clarify the legislation so that the agenda of the yearly shareholders' meetings include the item “consideration of financial statements and auditor's report”.

In that regard, according to the Canadian Oxford Dictionary , the word consideration means more than just tabling, but the act of considering and careful thought means not just tabling, but giving careful thought.

Since the financial statements are the main report of the agents on their management of the corporation, consideration and discussion of that document is a basic right of the principal shareholders, even those of banks.

There is also the presentation of the officers' remuneration policy to the shareholders' approval. With respect to banks, which are essentially public service companies operating in a very protected environment compared to other companies in the private sector, we find the remunerationpaid to officers literally outrageous.

Of course we know the process through which they receive very positive recommendations about remuneration systems providing they are paid this or that amount. Nevertheless, the end result is that the officers of these institutions are not necessarily paid a basic salary, but aggregate remuneration with a very generous option plan, and that is unacceptable.

As for the adoption of a code of procedure respecting the conduct of shareholders' meetings, the purpose of this proposal is to facilitate active and effective shareholder participation in meetings and to protect them from the arbitrary decisions of presiding officers who are anxious to cut short shareholders' remarks. Our suggestion is that each corporation prepare a code of procedure respecting the conduct of these meetings and that this procedure be adopted at an annual meeting of shareholders within a reasonable timeframe.

Some banks, and more particularly the Laurentian Bank, have voluntarily adopted such a code, but it is not a requirement of the bill.

Corporations should also be required to prepare a comprehensive report on all shareholders' meetings and send it to all shareholders. Our recommendation is that corporations be required to do so. Some of them already do, but there is no requirement to that effect in the bill.

Another suggestion is to reduce the barriers that prevent shareholders from making proposals before and during shareholders' meetings. This suggestion is being made generally rather than by the board or the management of banks exclusively. At this time, a shareholder must hold 5% of the shares of a financial institution or public corporation or have control to be entitled to present candidates as directors on the board.

Do members know how much 5% of the Royal Bank shares represents? It represents $900 million. I do not think any members has that much money or has the proposed control of a bank to be able to present candidates. I do not know too many people with that kind of money.

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 12:20 p.m.
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Bloc

Pauline Picard Bloc Drummond, QC

Mr. Speaker, it gives me great pleasure to speak to the motions brought forward by the Bloc Quebecois and supported by my colleague for Saint-Hyacinthe—Bagot, who worked very hard on this issue. He submitted a brief on the subject, listened to hundreds of witnesses and also took to heart most of the recommendations made by witness groups.

The problem with this bill, and it was mentioned earlier, has to do with banks with assets totalling under $5 billion.

We are also concerned with the recommendations made by the Association de protection des épargnants et investisseurs du Québec. It submitted a brief at the committee hearings on Bill C-38, which is now called Bill C-8.

The Association de protection des épargnants et investisseurs du Québec then said:

Bank ownership is widely spread in Canada and it is so intended in order to limit a big shareholder's capacity to control one or more financial institutions while these are considered to be public services. Unfortunately, this widespread shareholding has had a perverse effect—

I repeat, “a perverse effect”,

—by leaving way too much influence in the hands of the directors of major banks. This perverse effect could well be eliminated through some legislative changes to the Banking Act.

The Bloc Quebecois supports the recommendations made by the Association de la protection des épargnants et investisseurs du Québec, and that is why we brought forward the motions read earlier. We have moved many more in support of the association, but they were rejected.

The association has made numerous representations to the federal government, to the McKay Commission in 1997, to the Standing Senate Committee on Banking in 1998 and to the House Standing Committee on Finance in November 1998. Despite these many meetings, Bill C-38 and Bill C-8 did not take any of the association's recommendations into account.

For the most part, these recommendations refer to the recommendations made by the association. I would like to quote some of these recommendations if I have enough time, but I know that time flies.

First there is the restriction on the number of boards a director is allowed to sit on at any one time. Our proposal dealt with the restriction on the number of boards a director would be allowed to sit on at any one time. What exists now is the old boys' club rule where “You appoint me, I appoint you, and we appoint each other”.

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 12:15 p.m.
See context

Bloc

Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

moved:

Motion No. 6

That Bill C-8 be amended by adding after line 33 on page 34 the following new clause:

“70.1 Section 160 of the Act is amended by striking out the word “and” at the end of paragraph (h) and by adding the following after paragraph (i): j ) a person who is a director of another financial institution; and k ) a person who has, directly or indirectly, an interest in the supply of products or services to the institution.

Motion No. 7

That Bill C-8 be amended by adding after line 20 on page 35 the following new clause:

“71.1 The Act is amended by adding the following after section 161:

161.1 (1) The position of chairman shall be separate from the position of chief executive officer and shall not be held by the same person.

(2) For greater certainty, the role of the chairman shall be to ensure that the board of directors assesses the management of the institution, while the role of the chief executive officer shall be to manage the institution's day- to-day activities.”

Madam Speaker, basically, these amendments have three purposes. The first is to give more power to shareholders of financial institutions. Earlier, we spoke about the special ownership structure of the Canadian financial sector and that is precisely the idea of the first motion. We said, for example, that for large banks 20% of the shares can be held by a single shareholder and that 80 % of voting shares would be widely distributed in the public.

The effects of such a distribution can be negative since small shareholders have very little to say, particularly during annual meetings of the large Canadian banks, and the bill is designed to strengthen the powers of those small shareholders.

We add our voice to that of the Association de protection des épargnants et des investisseurs du Québec, the APEIQ. We want to give our support to its campaign for more democracy at annual meetings of banks, as well as in the way the boards of directors of financial institutions operate.

On this point, in our first group of amendments, we say that shareholders, no matter how small, have a right to be heard and to participate in any decision made by the financial institutions. To do so, they must receive prompt and timely notice of a general meeting. They must have all the documents relevant to this meeting and they must also be allowed to be heard, not just on matters having to do with the profitability of the financial institution, but also on any other matter which directly or indirectly affects the activities of the institution per se.

I will give an example. Right now, it is not possible for shareholders at a general meeting to raise matters having to do with the social aspects of a company's activities. Nor may they raise political issues. For instance, they could not ask questions about the activities of a company in which they were a small shareholder in countries where democracy was not the rule and where fundamental rights were not respected. It is not possible at a general meeting to table resolutions along these lines or even to question the board of directors. It is time that this changed. It is now 2001 and the democratic system in use at the general meetings of major financial institutions is completely archaic.

There are also other motions, one of which was to avoid any possibility of conflict of interest.

A person cannot sit on the board of a major bank and also provide that bank with goods and services. This would make him or her both judge and party to the action when it came time to make decisions relating to the financial institution.

For example, someone cannot be a member of the board of a bank and a shareholder in a company of external auditors, for instance, hired by the bank to audit its financial statements.

What we are proposing then is to ensure that there are new provisions which would, for example, call for questions to be asked and for it not to be acceptable for a board member to be directly or indirectly involved in providing the institution with products and services. Nor would it be allowed for a board member of one financial institution to also sit on the board of another. This could lead to problems.

That is the gist of what we are proposing. It is also the position of the Association de protection des épargnants et des investisseurs du Québec, APEIQ, which we totally endorse.

It is our hope that, in the spirit of greater democratization and transparency of the activities of the financial institutions, the government will support such proposals, along with the members of the other opposition parties. They cannot help but improve things from the point of view of equity, small shareholder participation, democratization and, above all, transparency of the activities of these major financial institutions.

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 12:10 p.m.
See context

Bloc

Pauline Picard Bloc Drummond, QC

moved:

Motion No. 5

That Bill C-8, in Clause 65, be amended by replacing line 6 on page 32 with the following:

“in whose names the shares are registered in the institution's registers and entitled to receive notice of a meeting under”

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 12:10 p.m.
See context

Bloc

Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

moved:

Motion No. 3

That Bill C-8 be amended by adding after line 20 on page 28 the following new clause:

“54.1 Subsection 46(2) of the Act is replaced by the following:

(2) The shareholders of a bank shall, by resolution at the meeting of shareholders called pursuant to subsection (1), a ) approve, amend or reject any by-law made by the directors of the bank; b ) subject to section 168, elect directors to hold office for a term expiring not later than the close of the third annual meeting of shareholders following the election; c ) appoint an auditor or auditors to hold office until the close of the first annual meeting of shareholders; and d ) adopt a code of internal procedure respecting the conduct of meetings of shareholders.

Motion No. 4

That Bill C-8, in Clause 63, be amended by replacing lines 21 to 33 on page 31 with the following:

“63. Subsection 138(1) of the Act is replaced by the following:

  1. (1) Notice of the time and place of a meeting of shareholders of a bank and the complete minutes of the last meeting of shareholders, whether that meeting was an annual or a special meeting, shall be sent not less than twenty- one days or more than fifty days before the meeting, a ) to each shareholder entitled to vote at the meeting; b ) to each director; and c ) to the auditor or auditors of the bank.

(1.1) A bank with equity of five billion dollars or more shall set out in the notice of a meeting the number of eligible votes, as defined under subsection 156.09(1), that may be cast at the meeting as of the record date for determining those shareholders entitled to receive the notice of meeting or, if there are to be separate votes of shareholders at the meeting, the number of eligible votes, as defined in that subsection, in respect of each separate vote to be held at the meeting.”

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 11:55 a.m.
See context

Etobicoke North Ontario

Liberal

Roy Cullen LiberalParliamentary Secretary to Minister of Finance

Madam Speaker, what I propose to do is deal with the motions in the following order: Motion No. 14 from the member for Prince George—Bulkley Valley; then those from the member for Saint-Hyacinthe—Bagot, the Bloc amendments; and then finally the amendments from the NDP member for Regina—Qu'Appelle.

Dealing first with Motion No. 14, of course the members on this side of the House do not need convincing about the importance of the credit union movement and the kind of expanded and enhanced role we would like to see them play in the Canadian economy by providing consumers with more choice and by providing more competition. That is a given. The Secretary of State for International Financial Institutions, when he spoke at committee, gave the undertaking that the government would work with the credit union movement to try to enhance its role in the Canadian economy.

With respect to this particular motion, which was actually put forward by the NDP at committee, I would just like to mention that the member for Regina—Qu'Appelle seems to argue that the legislation does not provide equal treatment to credit unions.

The credit union movement, when it came to the committee, was looking for preferential treatment. We cannot accept having treatment for the credit union movement that would be preferential to the treatment we have for other financial institutions.

Members on this side are not the only ones to work actively with the credit union movement. The Department of Finance has worked closely with it in developing Bill C-8. The resulting legislation responds to the need of credit unions for greater structural flexibility as they move to restructure their operations and become more integrated.

However with this new flexibility come prudential concerns resulting from a whole new set of ownership possibilities, most of them unknown at this point. Because the landscape is changing so quickly we must be concerned about the potential for prudential risks. The control requirement is necessary to safeguard against such risks and is designed to ensure the parent company has the power to intervene in situations where a subsidiary might get into financial trouble. These same provisions apply to other financial institutions such as large banks and insurance companies that are also widely held.

Given the broader risks associated with this new flexibility it is more prudent, in the government's view, to establish a general safety net or prohibition and to provide the regulatory flexibility to make exceptions as necessary. This is a common use of existing regulatory authorities. If unforeseen circumstances arise, a general prohibition allows us to err on the side of caution.

The change made to proposed subclause 396(a) at committee would broaden the scope of the regulation making authority and provide further comfort to the Credit Union Central Canada, CUCC, that the government had all the flexibility it needed to provide exceptions from the control requirements as necessary.

The Department of Finance is already engaged in an extensive drafting exercise to prepare the regulations stemming from Bill C-8. It has had early discussions with the CUCC on the possibility of drafting a regulation that would provide the required flexibility. Once approved, the regulations would have the same effect as legislation.

I now want to speak to Motion No. 9 by the hon. member for Saint-Hyacinthe—Bagot. This motion deals with the matters the minister might take into account in determining whether or not to approve acquisition of a significant interest in a bank.

The matters to be taken into account under proposed paragraph ( i ) of the motion are contemplated in paragraph ( f ) on the conduct of businesses and operations of applicants. Consequently, the minister shall have the legislative authority to take into account the matters outlined under paragraph ( i ).

Since there is no need to amend the legislation to allow the minister to take these matters into account, it was determined for reasons of clarity and transparency to have these matters set out in the guidelines.

The guidelines indicate the government's commitment to take these matters into account in category changes.

I will clarify a point made by the member for Saint-Hyacinthe—Bagot. In his speech he seemed to imply that a bank with assets of over $5 billion may not be subject to the widely held rule. Bill C-8 states that banks with assets over $5 billion would automatically be subject to the widely held rule.

We have other motions before us from the member for Regina—Qu'Appelle, the NDP finance critic, and I will now refer to them.

I will move to Motion No. 10, which deals with low cost accounts. The member for Regina—Qu'Appelle and others spoke about how the government and the Liberal Party have talked about the need for low cost accounts. The amendment from the NDP would amend the definition of low fee retail deposit accounts in clause 439(1) to specify that such accounts shall cost $3. The members opposite seem to be implying that we do not have a commitment to low cost accounts.

Bill C-8 in fact establishes the low cost account and that is exactly what the Liberal government has advocated for some time. Rather than reneging on our promise, the bill delivers on that promise. As members are aware, the Department of Finance has successfully negotiated low cost account memoranda of understanding with each of the major banks.

The views of consumer groups on the desired features of the low cost account were sought prior to negotiating the arrangements. Taking those views into account, the accounts adhere to certain standards, including a maximum monthly fee of $4 and the availability of some in branch transactions. Providing banks some flexibility in pricing and designing the accounts ensures consumers greater choice in obtaining low cost accounts that best meet their needs.

Motion No. 11 from the member for Regina—Qu'Appelle deals with branch closures. I will comment on that briefly. Our proposed reforms are intended to encourage financial institutions to be more responsive to the public without unduly interfering in the day to day business decisions of banks. Some members opposite have clearly pointed out that the motion presented by the member for Regina—Qu'Appelle is intrusive into the day to day decision making of banks.

Issues such as branch operating hours and closures are a matter for individual banks and the marketplace to decide. That being said, we believe consumers should receive adequate notice of branch closures to facilitate adjustment to the closures. Under our new policy framework, should a financial institution choose to close a branch it would be required to provide at least four months' notice. If the branch is the last one in a rural community, six months' notice would be required. The notice period would give the community an opportunity to discuss alternatives with the institution or to approach other financial institutions that could perhaps fill the gap. That deals with the motions in Group No. 2.

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 11:45 a.m.
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Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Madam Speaker, I thank you for recognizing me at this time, which actually accomplishes a couple of goals. First, since I have had to stand five or six times to be recognized, I have been afforded needed exercise. Second, I appreciate being able to speak before the parliamentary secretary on this particular grouping because I can hopefully change his mind since I think he may have considerable influence on the way the votes are conducted on the other side. At least I would hope he has, although I sometimes even wonder about that.

Let me address the issues that are before us in this group of amendments. I will begin, of course, with the matter of the penalty that is proposed to be amended by the member from the Bloc.

He proposes that the maximum penalty be changed. In order to see how the clause reads now, I need to haul out this book, the bill we are amending, Bill C-8. It says the maximum penalty for a violation is $50,000 in the case of a violation that is committed by a natural person and $100,000 in the case of a violation that is committed by a financial institution. That is for breaches of the act and of the regulations made by the minister.

I want to draw attention to the fact that this states the maximum penalty, so I think arguments could be made in favour of this particular amendment. The maximum penalty right now is $100,000 and the amendment says it should be a maximum of $500,000. This does not mean it is going to be applied.

As a matter of fact, if we read the next section, which is not referenced in this amendment, it states that in assessing the penalty these are some of the issues which are to be taken into account: the degree of intention or negligence on the part of the person committing the violation; the harm done; the history with respect to previous convictions or violations; and any other criteria that may be prescribed.

In assessing a penalty for a violation, I am sure that a large bank, a huge financial institution, would, under that prescription, be given a larger penalty than a small credit union somewhere, depending on the severity of the violation. Yet at the same time, I am somewhat inclined to have a substantial penalty when a large business just will not comply. That could happen. I cannot imagine under what circumstances, but it could happen.

I think, for example, of a large but unnamed mall in Edmonton. When it first started in business we had the Lord's Day Act in place in Alberta, which meant that some days were available to families to spend together because basically all of the stores were closed and just essential services were provided. It was a wonderful time, actually, when I look back at it, when we could get together with our families. We had freedom. People were not obliged to go to work. It was the same day for everyone.

Then that particular mall said that if it were to be fined $10,000 a day every time it was open on Sunday that was a fair and reasonable cost of doing business. It just paid the fine and broke the law with impunity. There was no provision under the law to escalate the penalty; it was just a straight $10,000 a day. The mall gladly paid the fine and made a lot of money.

By the way, I believe that is where the erosion started. Then it went right across the country, so that working people now no longer have a day off each week that applies to all family members. Very seldom do we see a family being able to get together. Either mom has to work or dad has to work or one of the kids who has a job at the store has to work. They cannot be together.

That is an example of a penalty so small that the business was not compelled at all to obey the law. In that sense, I have a bit of a tendency to be in favour of just increasing the maximum. It would not necessarily be applied, but this amendment would put some teeth into this for those who were in blatant violation and who continued to be so.

I must hurry because I have spent too much time on that particular provision. The next motion is Motion No. 9. That has to do with the application of a problem specific to Quebec at this time but which could happen in other provinces as well. In order to preserve my time, let me simply say that I have an inclination to agree with it.

Motion No. 10 has to do with the provision that the banks should provide for a low cost account. I do not really believe that we should have this in legislation or in law, although I agree with the principle of it. I would much rather see the banks provide these necessary low cost accounts and advertise that fact.

If a bank were to have an ad in the paper that said there were a number of people in our society from whom they just did not make a great deal of money but for whom they felt obliged to provide a banking service at a low cost, I think the bank would get a lot of public relations benefit simply by advertising that and providing a service. The bank could ask small businessmen in towns and cities or wherever to support its business with their business. I think it would benefit the bank.

I agree with the principle that a person of limited financial means should have the ability to go into a bank and cash a cheque and to have a low cost bank account. That is definitely a principle I agree with. As I said, the only reason I would vote against this is that I think would be overkill. I also do not agree with putting in a fixed amount, because maybe the bank could do it for less. Maybe of necessity it has to be $4 and a bank would be in violation if we ensconced $3 in the legislation.

I am opposed to this particular motion on the basis that it is too specific, and I think the same goals, which I agree with, can be achieved by other means.

I turn now to Motion No. 11, also put forward by the NDP member, which proposes that the closing of the branches of a bank “can only take place for reasons of financial non-profitability.” I hate to say it, but this is a dreadful amendment.

I think it is a huge imposition on business operations. It is like telling farmers they could plant only a certain kind of crop and the only reason they could ever quit planting would be if they were not making money on it; otherwise, they would have to plant that crop. I disagree with that.

I believe the banks should have a certain degree of flexibility to open and to close branches based on an efficient way of providing services in the community. For example, let us say that there is a branch over here and there is a branch over there. With modern transportation it is now much easier for people to get around, so if the banks decided to have one branch operating in the middle instead of having two branches operating, it would mean the closure of two branches. Neither of them might be losing money, but the bank could be more efficient and provide a better service for less cost, including services for low income people. I do not think we should stand in the way of this. In this particular instance, I would simply say that I would be really hard pressed to support Motion No. 11.

The last motion is the one on the credit unions, proposed by the member for Prince George—Bulkley Valley. I propose that we heartily support it. This is where I want to get the ear of the parliamentary secretary over there and have him influence all of his Liberal colleagues to vote in favour of this very fine amendment.

I happen to believe in the credit union movement. My dad was a leader in the credit union in Saskatchewan for many years. He was on the board, on the finance committee and on the loans committee. He did all sorts of things. As a result of having grown up in that kind of an atmosphere, I guess, I am sort of inclined toward credit unions.

Over the years I have given some business to the banks for different reasons, but I have found that in a competitive market my dealings with the credit unions have been most satisfactory. I do not hesitate at all to give a little bit of free advertising to them here today. They can use this clip if they want to. I give them permission. I do not know whether the rules of the House of Commons permit that, but I certainly support the credit union movement and this amendment strengthens it. The reason we should favour this amendment is that one of the best things for the Canadian financial services industry is to have good competition, where we can say to our financial institutions “Treat me like that and I am out of here”.

I am going to run out of time here, but I remember when I had a bank loan for purchasing a car. I asked the bank whether I could pay the loan off more quickly. The bank said that I could but I would have to pay a penalty. Members would not believe it, but the total payment the bank wanted in order to have me pay off that loan early was greater than the sum of the remaining payments. I said to the bank that either it was nuts or it thought I was. I was not willing to comply with that. I just finished off my payments and said that if that was how the bank did business I would look elsewhere. Sure enough, soon I found another financial institution that pleased me more and I just moved my business to it.

That is the very best thing we can do: provide competition. Credit unions are one of the primary ways of holding the banks responsible and giving them some real competition.

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 11:30 a.m.
See context

Bloc

Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

Madam Speaker, I would like to go back to the comments made by the hon. member for Drummond on the importance of the whole issue of the classification of banks and the degree of ownership.

For the benefit of those who are listening, I should point out that the new bill on financial institutions establishes three categories of banks: major banks, that is those with equity of $5 billion or more; medium size banks, that is those with equity of $1 billion to $5 billion; and small banks, that is those with equity of less than $1 billion.

For each of these categories, the degree of ownership is different. For example, in the case of major Canadian banks, such as the Royal Bank, an individual cannot hold more than 20% of the voting shares, while 80% of the shares must be widely distributed among the public.

The bill has a major impact on medium size banks, such as the National Bank in Quebec. For these banks, including the National Bank, the new degree of ownership is 65:35. In other words, a single individual can own up to 65% of the voting shares and thus have full control over the National Bank, while the other 35% must be widely distributed among the public.

This new provision leads us to fear the worst in Quebec. This bill discriminates somewhat against the National Bank, the largest in Quebec, because the treatment of the Royal Bank, the largest in Canada, where one individual is allowed to own a maximum of 20% of voting shares, and the National Bank, where one individual may own up to 65% of voting shares, creates discrimination which is unjustified under the circumstances.

We are told that the purpose was to improve the National Bank's funding flexibility. I have often asked the Minister of Finance why one individual holding 65% of National Bank shares confers more flexibility than 65 individuals with 1% each. I have never had an answer. These new provisions are cause for alarm.

Recently I read comments by economists to the effect that this is no big deal, because the National Bank's equity is increasing by leaps and bounds anyway, and soon will be in excess of $5 billion. Such an analysis is wrong.

It is certain that the bill states that the banks can be reclassified. This means that, should the National Bank one day have over $5 billion in equity, it could be classified as a major bank and therefore the voting share split would be 20%:80%. In other words, with this bill a single individual could own 20% of voting shares and the other 80% of voting shares would be public, rather than the present 65%-35% split.

The point on which I disagree with the economic experts is that, under this bill, which must be read carefully, the Minister of Finance has three years to change the bank's classification. That time limit can be extended as he sees fit. In other words, even if the National Bank attains the $5 billion equity ceiling, the Minister of Finance could decide to wait three years before reclassifying it as a major bank subject to the 20%:80% split of individual and public voting shares.

Not only may he wait three years before recategorizing it, but he has the authority to extend this period. In other words, even with equity of $5 billion and more, the National Bank would not automatically be recategorized as a major bank and would therefore still be in the 65:35 category, that is 65% of shares held by one person.

There is a danger in this. Not only is the National Bank the biggest bank in Quebec, but it is also the bank that finances SMBs. As well, Quebec is proud to have such a large bank, which, through the contribution of people like Mr. Bérard, has grown at record speed to become the flagship it is today.

Concern about this is so great that even Mr. Landry, former finance minister and deputy premier, and now premier, of Quebec, wrote to the federal Minister of Finance last June 2 to suggest a number of public interest criteria for evaluating any banking operation involving a mid-sized bank.

To my great surprise, just before the election, the Secretary of State for International Financial Institutions had even agreed to these criteria being part of the banking bill. He had even signed beside the four criteria suggested by Mr. Landry, saying “Yes, provided that it is not only for Quebec, we can Canadianize—as it were—these criteria, and make them part of the bill”.

A few days later, the secretary of state changed his mind. I do not know why, but after putting his signature on this document, he changed his mind and subsequently refused to include these evaluation criteria in the bill.

There is no substantive difference between Bill C-38 as it was before the election and Bill C-8 today. When the Minister of Finance and the secretary of state released the new Bill C-8, they also issued press releases and attachments, one of which concerned the evaluation criteria for operations involving mid-sized banks, such as the National Bank.

On reading these criteria, we realized that the government had understood the message on additional criteria. We were satisfied with that, but only half satisfied. What we called for, and this is the heart of the amendment, it is the essence of the amendment we are proposing this morning, is that these criteria, which parallel the bill and are to be used as guidelines by the Minister of Finance in making a decision regarding the shares in a medium size bank, such as the National Bank, must not be left to one side and left out of the decision making process, but incorporated in the heart of the Bank Act, to ensure reference is made.

In other words, we are not telling the government to reject all transactions involving the National Bank. That is not the intent. We want to ensure additional security, additional criteria leading to the best possible decisions benefiting Quebec's economy and finances and the financial sectors of Quebec and Canada too.

We are not asking the government to be obtuse or to reject every proposal. We would be the first to criticize this sort of attitude, because we want our financial and banking institutions to move ahead and to take their place in the world, the National Bank and others too.

So, it is with an open mind that we are proposing these amendments and we hope that the government will accept them. I would say, and this is evidenced by all the representations that we have made, that since the beginning of the process, the McKay study, the white paper and the bill before us, the Bloc Quebecois has always looked positively at the reform of the financial institutions act, particularly since it is three or four years late. The delay is getting longer by the week, considering how quickly the financial sector is changing in Quebec, in Canada and in the rest of the world.

We hope this bill will be quickly passed. However, would it be possible for the government to show some openness for once? We are not asking much; we are not asking for a complete overhaul of the bill. We are simply asking the government to reassure Quebecers who are concerned about the new provisions that specifically apply to the National Bank. They hope that this new reform of financial institutions will have a positive impact on the financial sector and will not raise concerns about takeovers that would be detrimental, particularly to the interests of small and medium sized businesses in Quebec.

I urge the government which, through its secretary of state, has already agreed to the four conditions, the four criteria proposed by Mr. Landry in June, to include these criteria in the core of Bill. It recently tabled a document, along with Bill C-8, that includes these criteria, albeit in a different format, but it includes them nevertheless.

So, I am asking the government to simply show some openness by taking that document and including it directly in the core of the bill. If it does that, the Bloc Quebecois will support the bill.

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 11:05 a.m.
See context

Bloc

Pauline Picard Bloc Drummond, QC

Madam Speaker, I want to tell you how proud I am that the occupant of the Chair is a woman. Women often have to work really hard to get certain prestigious positions. So, it is always with pride that I take the floor when you are presiding over our proceedings.

First, I would like to say that the Bloc Quebecois supports Bill C-8, and to reassure certain groups, we agree that the bill ought to be passed as quickly as possible so we can have a swift and smooth transition.

Nonetheless, the bill as it stands does not meet all the requirements of certain groups.

The most important thing for Quebec is to protect the largest bank in Quebec, the National Bank. This is a very important concern for our nation. This bank is the Quebec's largest bank, and Quebec businesses have their money there.

This bill will make the National Bank more vulnerable than the big Canadian banks, and that is unacceptable. This bill provides for a three tier system, as far as individual control of banks goes.

I would like to explain once more something I have already talked about in the House, and I think I made myself clear at the time. Let me just go over the general concept to show the people who are watching, as well as you, Madam Speaker, what is going on in that system that we want to create and that seems acceptable to us.

As we all know, for the big Canadian banks, the Royal Bank for example, voting shares that one shareholder can own increase from 10 to 20%. So, for banks with assets worth $5 billion or more, one shareholder could own 20% of the bank's shares.

The problem is, however, and this is the case in Quebec, that small banks, those with assets worth less than $5 billion, the Minister of Finance is allowing one shareholder to own up to 65% of the bank's voting shares. This means that one shareholder could purchase 65% of the shares of the National Bank. That individual would control the assets of the Quebec people. It is incredible. Why is there such a difference?

Why is one shareholder allowed to own 20% of the Royal Bank's voting shares, but when it comes to the National Bank, a single shareholder, it could be a foreigner, if he has the money and holds 65% of the bank's voting shares, could decide to transfer the bank's head office, lay people off, transfer the bank's assets, transfer Quebecers' money outside the country because he is a foreigner, and the whole company will be administered in a foreign country?

So, those are the people's concerns. What will happen? In fact, jobs will probably be lost, and it is unacceptable to think that only one individual can manage most of this financial institution's assets. That is why we are denouncing this situation.

However, there was a certain change while this bill was being studied. Mr. Landry, now the Premier of Quebec, made demands that were incorporated in this bill. However these demands are like guidelines on the reclassification of the banks that were included before in schedule 1, banks with equity capital of less than $5 billion, of which the National Bank is one.

The idea was to include these guidelines in the bill, but they remained guidelines. It is a small step, but not enough for us. We must really ensure that these guidelines are incorporated in the bill. I would like to quote some of them:

All transactions involving a reclassification will be evaluated on the basis of merit. It will have to be shown that the operation will add to the bank's growth potential and that it will lead to better customer service.

The guidelines also state:

In determining whether a transaction involving a reclassification is in the public interest, the Minister of Finance shall take into consideration all the factors he considers relevant, including the security and solidity of the bank, the direct and indirect jobs, the location of the decision-making centre and the management of the bank, the needs of consumers, the bank's business and activities and the bank's prospects for the future in the context of world markets.

These elements, as they are not in the bill, may be amended by the minister as he sees fit. This is a matter of concern for us. It is all very nice that these guidelines were accepted, but what bothers us is that they are not included in the bill. They may be respected or not, as the minister sees fit.

The public as well as parliamentarians must put a great deal of trust in the minister right now, because he tells us is completely sincere. However if a new minister comes along, because ministers do change, whose philosophy is different from that of the current minister who wants us to trust him, how could we be sure that what we ask this new minister with a different philosophy will be respected? It is very important that this be included in the bill.

This process has to become more transparent and it should not cause us any more problem. Right now, there is something of a sword of Damocles over the National Bank because everything is up to the minister and nothing is set out in the bill. If it were, we could always refer to the legislation to show what the intent was, but it is not the case.

As I said earlier, we support the bill. We have worked very hard. My colleague from St-Hyacinthe—Bagot has even tabled a brief with the committee. He has put forward points that were included in the bill. However, we feel that we have been elected to protect the interests of Quebec consumers in our ridings. We are somewhat concerned right now, and when I say somewhat, I really mean to say that we are very concerned about the situation in which this bill puts the National Bank and the small banks with less than $5 billion in capital.

I raise the issue, but this is a concern not only for members of the Bloc Quebecois, but also for the directors of the National Bank. In view of this, the National Bank decided a few weeks ago to adopt a series of rules in order to prevent a hostile takeover at its expense. Looking for strategic partners, the president of the National Bank said that maintaining the head office in Montreal was simply not negotiable.

The shareholders passed two resolutions to protect the National Bank against a hostile bid. They agreed to drag things out so the directors would have more time to examine other bids. They also agreed to drop the limit on the number of common shares that could be issued by the bank. These measures clearly illustrated the concerns generated by the new environment.

With this bill, the Minister of Finance is giving himself the power to determine at his discretion, the future of Quebec's major banks. As I mentioned before, we find it unacceptable that this discretionary power has such sway, more even than the law itself.

In concluding, I would like to say once again that we will support this bill, but we would like the Minister of Finance to take into account the concerns of Quebecers and of the members of the Bloc Quebecois.

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 11 a.m.
See context

NDP

Lorne Nystrom NDP Regina—Qu'Appelle, SK

moved:

Motion No. 10

That Bill C-8, in Clause 113, be amended by replacing line 21 on page 72 with the following:

“tail deposit account available to each customer for a monthly fee of 3 dollars and that has the prescribed”

Motion No. 11

That Bill C-8, in Clause 125, be amended by replacing line 14 on page 79 with the following:

“on either of those activities. For greater certainty, the closing of the branch can only take place for reasons of financial non-profitability.”

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 11 a.m.
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Bloc

Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

moved:

Motion No. 9

That Bill C-8, in Clause 98, be amended by replacing lines 24 to 26 on page 62 with the following:

“out by the affiliates of the bank; h ) the best interests of the financial system in Canada; and i ) the impact of the transaction on the security and soundness of the bank, on direct and indirect employment at the head office and branch offices of the bank, particularly professional and specialized positions, on the location of the centre of decision making and management of the bank, on the needs of consumers, on the business and activities of the bank, and on the future prospects of the bank in world markets, the best interests of Canadians and, where the bank operates principally in one region, the best interests of those living in that region.”

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 11 a.m.
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NDP

Lorne Nystrom NDP Regina—Qu'Appelle, SK

moved:

Motion No. 2

That Bill C-8, in Clause 19, be amended by replacing line 15 on page 11 with the following:

“committed by a natural person, and $500,000”

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 10:45 a.m.
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Bloc

Gilles-A. Perron Bloc Rivière-des-Mille-Îles, QC

Madam Speaker, since this is the first time I have addressed the House during this parliament, I am sure that you will permit me a small aside.

I wish to thank the 50% of the voters in the lovely riding of Rivière-des-Mille-Îles who voted for me in the last election and to assure the other 50% who did not that I am still their MP and I will represent everyone in my riding, regardless of how they cast their ballot.

Second, I especially wish to thank the volunteers, who played a big role in my getting elected, as you know from your own personal experience, Madam Speaker. It is thanks to the work of your volunteers and mine, who worked their hearts out, that we have a seat in this House.

Third, I wish to welcome the new recruits, particularly my friend, the member for Châteauguay. He will find the House a place of wonderful experiences.

Fourth, I would ask you to pass on a message to the Speaker and to all your colleagues who were elected and appointed. I am certain that you will do a splendid, non-partisan job, and that you will ensure that we pay careful attention to the rules and procedures under which we must operate. Madam Speaker, I thank you in advance for the work you will do.

Now for the main topic. As everyone knows, I rise this morning to address Bill C-8, an act to establish the Financial Consumer Agency of Canada and to amend certain acts in relation to financial institutions.

I will begin by giving a brief background to the bill. It will be recalled that the MacKay report was tabled in 1998. My colleague, the member for Saint-Hyacinthe—Bagot, was a key player, suggesting some interesting amendments.

However, although we supported Bill C-38 in theory, subject to certain amendments, there was an exchange of correspondence with Quebec's then finance minister, Bernard Landry, who is now, as everyone knows, Premier of Quebec.

However, this exchange of correspondence between the Quebec minister of finance of the day and the federal Minister of Finance went nowhere. Fortunately, Bill C-38 died on the order paper because of the call of the precipitous election in November, for wich most Canadians still doubt.

Here we are this morning debating Bill C-8, which replaces C-38. Basically, the Bloc Quebecois can live with it, so long as a number of amendments are made. We have noticed in the new C-8, which is almost identical to C-38, that a number of changes have been made as the necessary result of the exchange of correspondence between the two finance ministers.

However, it leaves a bad taste in the mouth, since the concerns of the Quebec finance minister of the day, Bernard Landry, are not included in the bill. They are, rather, included in a schedule setting out guidelines for the reclassification of the banks, which had been in schedule 1 previously and whose owner's equity was less than $5 billion.

With regard to this schedule, the Bloc Quebecois has some concerns, since the schedule provides that:

—the Minister of Finance, in his sole decision, shall take into consideration, before permitting an exchange or the sale of one bank to another, the security and solidity of the bank, the direct and indirect jobs, the location of the decision-making centre and the management of the bank, the needs of consumers, the banks business and activities and the banks prospects for the future in the context of world markets.

The six points I have just outlined are just wishful thinking, since the bill would allow the current Minister of Finance, who, I believe, owns a shipping company, has adopted the practice since, of being the only master on board, like the ship's captain, when decisions are to be made. So, the minister has all the powers to ignore these six points without us being able to say or do anything about it.

Bill C-8 is much too important to allow a single individual, a single captain, that is the Minister of Finance himself, make the decisions about any changes to this legislation. This is very close to dictatorship. It is also dangerous considering that the government opposite has a great tendency to engage in cronyism and take care of its friends. We should be careful.

I strongly suggest that the final decisions be made by parliamentarians. We are here to make decisions. We are not decorating plants, we must make decisions. We must really be careful.

Another issue that is of concern to me and certainly to my friend, the hon. member for Drummond, is that the bill is three tiered with the possibility for an individual to own a bank.

It begins with large banks, that is those with equity in excess of $5 billion. The limit on individual ownership of shares is 20% of the value of the bank.

The second group includes banks with equity of one to five billion dollars, such as the National Bank, the only Quebec bank with a federal charter. Since equity for these institutions is less than $5 billion, 65% of the shares of that bank can be held by a single shareholder.

So we are back to the style of our finance minister, our great shipmaster, the only person who can decide how a bank can run itself. Will the bank defend the interests of its shareholders? Surely, since it is the majority shareholder. However, it will defend these interests to whose detriment. To the detriment of service and employees. This is cause for concern.

Then there are small institutions with less than $1 billion in equity, which can be owned 100% by one person. Unfortunately, that was not what the MacKay report recommended, as it suggested that ownership rules be changed to allow and foster the regrouping of small and medium sized financial institutions in a financial holding.

According to the MacKay report, several small financial institutions could associate and form a large bank with equity of $5 billion or more.

I see that my time is up, but I will indicate two other issues of concern to me.

First, Bill C-8 does not meet the expectations of the Bloc Quebecois about community reinvestment, not in the least. Second, it provides no protection to savers and investors.

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 10:35 a.m.
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Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Madam Speaker, I am pleased to speak to Bill C-8, a massive bill, as has been mentioned. It is a bill which, when I hold it in my hands, increases my weight by about 10%.

When we look at the proposed amendments in Group No. 1, we see that they are there to improve the bill. I will speak specifically to Motion No. 1 right now, put forward by my colleague, which deals with the reporting section. The parliamentary secretary just stated that there is a provision in the bill for this. For clarity, I will read from page 15 under “Annual Report”. It states:

The Minister shall cause to be laid before each House of Parliament, not later than the fifth sitting day of that House after September 30 next following the end of each fiscal year, a report showing the operations of the Agency for that year and describing in aggregate form its conclusions on the compliance of financial institutions with the consumer provisions applicable to them in that year.

Do members notice who is reporting? It is the minister. The minister shall lay a report on the table. Of course the minister can say exactly what he or she wants. It is reported in the House and we all know what happens to reports. Routine proceedings take place every day in the House and someone presents a report under the tabling of documents. Under one of those proceedings, the minister could simply table a report showing the operations of the agency.

Motion No. 1 is really quite different. It is difficult by reasoned debate to persuade the members on the other side of the House because I am not sure they are listening. If they are listening, they do not show it by their body language. All we see is a bunch of green foreheads over there that are not really—

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 10:25 a.m.
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Liberal

Roy Cullen Liberal Etobicoke North, ON

Madam Speaker, I will be speaking to Group No. 1. I take this opportunity to thank the members of the House of Commons finance committee for their constructive approach to this very important and very massive legislation.

I would like to comment on Alliance Motion No. 1 which deals with the reporting of the financial consumer agency.

I would point out that under Bill C-8, the Minister of Finance is responsible for the financial consumer agency of Canada. Reporting arrangements have been specified which would allow the minister to appropriately monitor the activities of the agency.

However, the bill currently contains a provision that ensures that the consumer agency will be fully accountable to parliament. In particular, clause 34 of the bill requires the minister to annually lay before each House of parliament a report showing the operations of the agency for that year and describing in aggregate form its conclusions of the compliance of financial institutions with the consumer provisions. The financial consumer agency of Canada accountability structure and government reporting requirements mirror those that are currently in place for OSFI.

The second motion in this group from the Alliance, Motion No. 13, deals with the Canadian payments system. The process for designating a payment system in the proposed legislation is very extensive and would require the minister to consult with payment system managers and participants before notification of designation.

It is not necessary to detail in legislation, as proposed in Motion No. 13, process issues that would likely be part of any consultation. It is likely that the minister would outline the public interest reasons for the possible designation during the consultative period. It is possible, but if the payment system manager and participants addressed the concerns of the minister, there would not be a need to designate.

I will go now to the motions presented by the member for Regina—Qu'Appelle, the NDP finance critic. Motion No. 8 concerns itself with bank mergers. I should make it absolutely clear to the House that the government recognizes the importance of the role that parliament can play in assessing the public interest impact of bank mergers in Canada.

That is why the merger review guidelines include referral to both the House finance committee and the Senate banking committee. Through the reports of these committees to the Minister of Finance, the views of parliament would be considered in reviews of large bank mergers in Canada. The report of the finance committee would be presented to the House of Commons.

The Minister of Finance, however, is ultimately responsible for the safety, soundness and efficient functioning of the financial sector in Canada. The ultimate decision regarding whether a merger is approved or not needs to rest with the Minister of Finance and should not be conditional on approval by a resolution in parliament.

Furthermore, the proposed change could seriously undermine the safety and soundness of the financial services sector. Since mergers involving troubled institutions would not require the special resolution, this would signal to Canadians that at least one of the banks involved is in financial trouble. This could lead to a run on either one or both of the institutions, which in turn could seriously undermine the public's confidence in the financial services sector and the payment system.

I will now go to Group No. 1, Motion No. 12, from the member for Regina—Qu'Appelle. The motion deals with adding a new clause that would require any regulations made under the new bill in a calendar year to be referred to a committee of the House, the Senate or both for a comprehensive review.

As members are aware, Bill C-8 is a significant legislative initiative that sets out in comprehensive detail the key policy framework announced in the government's June 25, 1999 white paper. Within this framework, there are authorities to provide flexibility to specify elements of the new regime in regulations. Any regulations proposed under this framework would be subject to the same rigorous oversight process that applies to regulations proposed under any other federal statutes.

The Privy Council Office will review the regulation to ensure that it is consistent with the objectives of the legislation and interested stakeholders will be given an opportunity to comment on the proposed changes.

A key component of this regulatory flexibility is that it allows the government to respond to rapid changes in the industry in a more timely way than might be allowed by a five year review of the legislation. The motion, as proposed, would negatively impact on this flexibility.

A yearly review of the regulations would create uncertainty for the industry as to any changes proposed by the government in a particular area. To the extent that the review created delays, the proposed motion could lead to regulatory initiatives not being completed in a more timely way than a full fledged legislative amendment. For this reason, the government does not support this proposed change.

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 10:20 a.m.
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NDP

Lorne Nystrom NDP Regina—Qu'Appelle, SK

Madam Speaker, that is why I was speaking in generalities about improving the powers of that financial agency. Motion No. 8, which is part of the first grouping, would speak directly to parliament through a democracy.

If there is a bank merger, under the current legislation the Minister of Finance would have the final say. That is the way it is today. The Minister of Finance has the final say. My amendment would, except in the case of insolvency, give the Parliament of Canada the final say. There would be a vote in parliament on whether or not a bank merger would go ahead. That is not very radical, but bank mergers could potentially be extremely important items on the public agenda or in terms of public policy.

We remember how in January 1998 four of the large banks wanted to merge: the Bank of Montreal, Royal Bank, TD and Scotiabank. We had a great debate on the matter. I am proud to say that our party at the beginning was very much opposed to these mergers, arguing that they would not help consumers and that they would concentrate more power into fewer hands in terms of financial institutions. I remember people saying that there was no use in fighting the large banks as they were powerful and would win. However, we led that opposition and within a year or so there was a lot of opposition across the country and in December 1998 the Minister of Finance said no to the merger of those four large banks.

As a result we now have a new mechanism in Bill C-8 before us today. Instead of democratizing the process and making parliament more meaningful in terms of the power MPs have to speak on behalf of their constituents, the Minister of Finance will have the final say as to whether or not a merger goes ahead.

We are saying in our amendment that a resolution of parliament should be the final say. We should vote yes or no. It would expand and empower the role of members of parliament so that someone from Nova Scotia, Manitoba, Quebec, Ontario, or anywhere in the country would have the final say in terms of the debate and the argument as to whether or not a merger is in the public good. We would decide if it is good for the country, if it will help consumers, or if it is good for rural Canada or different parts of Canada where mergers are to take place. The power should not reside in the hands of one minister, the Minister of Finance.

Madam Speaker, please try to divorce yourself from the idea that we will have the Minister of Finance for all time. This minister and the next minister may or may not make the proper decision. We should not leave that power in the hands of the Minister of Finance.

This is part of parliamentary democracy. It is part of democratic and parliamentary reform. It is part of empowering this place to be more meaningful and relevant to Canadians. When we see the alienation from this parliament and we see fewer people casting their ballots, it makes us wonder why we do not empower ourselves and make this institution more meaningful.

The House of Commons has to be a check and a balance on the powers of the executive and cabinet. Why do we not do that as members of parliament?

If members across the way voted for the motion, it would not be a vote of non-confidence in the government. In the case of a merger, unless there is an insolvency, parliament would have the final say. In the case of an insolvency the Minister of Finance would have the power to make that decision and make it very quickly. If the process is established under the bill, and this item is on the public agenda, then why would the Parliament of Canada not have the final say instead of the Minister of Finance?

My motion is a timid little step in the direction of parliamentary reform and parliamentary democracy and would make this place more relevant and meaningful. I hope members across the way will see this as an opportunity to bring in parliamentary reform and bring back more democracy to make this place more meaningful and more important in the lives of the average citizen.

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 10:10 a.m.
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Canadian Alliance

Dick Harris Canadian Alliance Prince George—Bulkley Valley, BC

moved:

Motion No. 13

That Bill C-8, in Clause 244, be amended by replacing line 9 on page 408 with the following:

“effect of the designation. The Minister must also provide in writing: a ) a statement of the reasons why, in the opinion of the Minister, it is in the public interest to designate a payment system; b ) the process by which consultation of the manager, the participants, and other interested parties who could be affected by the designation can take place, including how the Minister's concerns can be addressed; c ) a statement to the effect that where a system fails to adequately address a Minister's concerns, the Governor in Council may designate a payment system.”

Mr. Speaker, I am pleased to rise in the House on behalf of the Canadian Alliance Party to speak to Bill C-8 and in particular to the motions we put forward at report stage.

Motion No. 1 deals with a clause in the original bill that would require, upon the setting up and operation of the financial consumer agency, the commissioner of the agency to report its activities to parliament through the Minister of Finance.

We have stood in the House on many occasions calling for the independent arms of government agencies and commissions to report not through a minister but directly to parliament, and in this case to the Standing Committee on Finance. The motion reflects that an amendment be put that would require Financial Consumer Agency of Canada to report to the Standing Committee on Finance on a permanent basis.

Motion No. 13 deals with the operation of Interac services. The bill calls for the association to report every rule change during the normal course of operation to the Minister of Finance. This is an onerous demand. We would make an amendment that would give the Interac Association a very clear and transparent framework to operate under that is self-regulating. Its compliance people would have a very clear understanding of what is required of them by the Minister of Finance.

The motion would require that the Minister of Finance provide:

(a) a statement of the reasons why, in the opinion of the Minister, it is in the public interest to designate a payment system;

(b) the process by which consultation of the manager, the participants, and other interested parties who could be affected by the designation can take place, including how the Minister's concerns can be addressed;

(c) a statement to the effect that where a system fails to adequately address a Minister's concerns, the Governor in Council may designate a payment system.

The broad, transparent and clear framework included in the bill by the Minister of Finance would be sufficient for the association to conduct its normal day to day business transactions. It would not burden it with a requirement to report and discuss every rule change so long as it was operating within the broad framework.

That is what I wanted to say as far as the motions put forward from the Canadian Alliance in Group No. 1. Overall it is a progressive bill. While we criticize the government for being tardy on it, we are happy with the bill. It is bringing Canada's banking system to a more progressive stage so that we can compete with our competition around the world.

I ask government members to see the prudence and the common sense in these amendments and I am sure they will support them.

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 10:10 a.m.
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NDP

Lorne Nystrom NDP Regina—Qu'Appelle, SK

moved:

Motion No. 8

That Bill C-8, in Clause 84, be amended by replacing line 27 on page 39 with the following:

“made.

(4) Except in the case where an amalgamation is the result of one or more of the applicants not being financially sound, an amalgamation must be approved by a resolution of the House of Commons supported by a majority of the members of that House and a resolution of the Senate supported by a majority of the members of that House.”

Motion No. 12

That Bill C-8, in Clause 183, be amended by adding after line 44 on page 367 the following:

“978.1 On the expiration of one year after the coming into force of this Act, and on the expiration of every year thereafter, all regulations made in the previous year by the Governor in Council under this Act shall stand referred to such committee of the House of Commons, of the Senate or of both Houses of Parliament as may be designated or established for that purpose and the committee shall, as soon as practicable thereafter, undertake a comprehensive review of such regulations and shall, within one month after the review is undertaken or within such further time as the House of Commons may authorize, submit a report thereon to Parliament including any recommendations pertaining to the object, impact or necessity of such regulations or any other aspects thereof that the committee deems appropriate.”

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 10:10 a.m.
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Canadian Alliance

Dick Harris Canadian Alliance Prince George—Bulkley Valley, BC

moved:

Motion No. 1

That Bill C-8, in Clause 5, be amended by replacing lines 14 to 16 on page 5 with the following:

“and report, subject to section 17, to the House of Commons from time to time on all matters connected with the administration of this Act, which stands permanently referred to the Standing Committee on Finance, and of the consumer provisions”

Financial Consumer Agency Of Canada ActGovernment Orders

March 27th, 2001 / 10:10 a.m.
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The Speaker

There are 14 motions in amendment standing on the notice paper relating to the report stage of Bill C-8.

The Standing Committee on Finance considered this bill at clause by clause on March 20, before my statement outlining the guidelines for the selection of motions at report stage.

Since hon. members could not be aware at that time of the new way to implement those principles, the Chair will once again be generous and select motions which could have been proposed in committee but were not.

May I remind all hon. members to use committee stage to propose their amendments. If hon. members do not avail themselves of this opportunity, the Chair will not select motions which could have been proposed in committee at report stage.

The motions will be grouped for debate as follows.

Group No. 1: Motions Nos. 1, 8, 12 and 13.

Group No. 2: Motions No. 2, 9 to 11 and 14.

Group No. 3: Motions Nos. 3 to 7.

The voting patterns for the motions within each group are available at the table. The Chair will remind the House of each pattern at the time of voting.

I will now put Motions Nos. 1, 8, 12 and 13 to the House.

Business Of The HouseOral Question Period

March 22nd, 2001 / 3:35 p.m.
See context

Glengarry—Prescott—Russell Ontario

Liberal

Don Boudria LiberalLeader of the Government in the House of Commons

Mr. Speaker, I am pleased to make the weekly business statement and to indicate to the House that I intend to do my utmost to have order paper questions answered as rapidly as possible.

This afternoon we will resume debate on Bill C-12 respecting compensation for judges. We will then continue with Bill C-18, the equalization bill, which we started this morning. That will be followed, if there is time, with Bill C-17 respecting the innovation foundation.

On Friday we will consider report stage of Bill C-4 respecting the sustainable development foundation, and any time left will be used on second reading of Bill C-7, the youth justice bill.

In an effort to complete consideration of the youth justice bill, we will continue discussing that bill on Monday next.

Next Tuesday we will commence report stage of Bill C-8 respecting the financial institutions legislation. Should that be completed, we would then continue with Bill C-22, the income tax amendment. As previously announced and as adopted by the House, in the evening there will be a special take note debate on the summit of the Americas.

Next Wednesday, March 28, we will debate Bill C-2, the employment insurance amendments, at report stage and hopefully have third reading on next Thursday, March 29.

That is the agenda of the House for next week.

Committees Of The HouseRoutine Proceedings

March 22nd, 2001 / 10:10 a.m.
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Liberal

Maurizio Bevilacqua Liberal Vaughan—King—Aurora, ON

Mr. Speaker, I have the honour to present the first report of the Standing Committee on Finance regarding its order of reference of Tuesday, February 13, in relation to Bill C-8, an act to establish the Financial Consumer Agency of Canada. The bill is the result of many years of study and consultation by a number of committees and task forces.

On behalf of the committee, I thank members of parliament, committee staff, departmental officials, witnesses and stakeholders for their work. As a result of their hard work, we have produced a very important piece of legislation for the Canadian financial services sector and Canadian consumers.

The committee has considered Bill C-8 and reports the bill with amendments.

Modernization Of House Of Commons ProcedureGovernment Orders

March 21st, 2001 / 8:20 p.m.
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NDP

Lorne Nystrom NDP Regina—Qu'Appelle, SK

Mr. Speaker, I will say a few words in the debate as someone who has been in the House for quite a while. I was first elected in 1968. This is my ninth mandate in the House of Commons, having missed the period from 1993 to 1997. I have seen a lot of differences, and I think many of the differences are negative in terms of the lack of seriousness and respect the present government shows toward parliament.

A friend said to me a few minutes ago in the lobby that the government does not really have respect for the House of Commons. I think there is a lot of truth in that. In 1968, for example, there were a lot of great parliamentarians. I remember John Diefenbaker, Allan MacEachen, Ged Baldwin, Stanley Knowles, Tommy Douglas, David Lewis, Réal Caouette, and people of that sort.

In those days there seemed to be more respect for the House by the government and a lot more real debates would take place. I do not think a serious announcement was made by the government in the late 1960s and early 1970s that was not made on the floor of the House of Commons. The minister would come to the House, he or she would make a statement, and the response would come from the opposition parties.

Gradually over time that practice changed. I think it changed more radically after the election in 1993 of the government that now sits across the way. Even in the days of Brian Mulroney and the Tories there seemed to be more give and take in this place. In those days I sat on the finance committee which was chaired by Mr. Blenkarn. It was one of many committees that had a semblance of independence about it, a certain arm's length relationship with the government.

There should be a certain amount of creative tension between the executive and parliament. Parliament should hold the executive to account. We do not have that today. That is one reason our politics have descended into a vortex of great negativity which is getting more and more negative all the time.

It does not mean that in the former days it was not positive. The member for Winnipeg—Transcona was here in 1979, I believe, and on. It was not any less partisan in those days. It was still very partisan. If we ever want to see somebody partisan, watch a John Diefenbaker or a Tommy Douglas or an Allan MacEachen. They were really partisan individuals and great parliamentarians. However there was great debate in those days and parliament really meant something. It was the centre of activity in terms of public policy in the country. Much of that is gone now.

We are heading toward a crisis in terms of this institution and the respect that it does not have across the country. Today we are having a debate in the House. As I speak I hear about 10 to 12 members speaking in the House, and that is normal. Even the members do not take this place very seriously. During the day, of course, committees are meeting at the same time. This place is getting more and more irrelevant in terms of decision-making and in terms of having a real impact. We need to take a serious look at real parliamentary reform.

In addition, we need electoral reform. We must look at the idea of bringing in a measure of proportional representation. We must do something about the Senate. I believe we should abolish it. A lot of people believe we should reform it. In the polls only 5% of the Canadian people support the existing undemocratic, unelected Senate, yet parliamentarians have continued decade after decade to support that institution across the way. We must do some of these things and do them soon.

In the House we start with the idea of confidence votes. We have far too many confidence votes in the House of Commons. We are the most handcuffed parliamentary system in the world. We model ourselves after the British parliament. It is common to have a bill defeated in the British House of Commons.

The Blair government was exceedingly popular in its first three or four years and is still popular. It has had many bills defeated by its own backbenchers. It was the same in the days of the Thatcher Conservatives. Margaret Thatcher was extremely popular, had great control over the country in terms of her agenda and her vision, and changed that country dramatically. Despite that, there were several occasions when she lost votes in the House of Commons on certain bills. I say so what? All the better. All the more democratic.

I meet government backbenchers every day who are horrendously frustrated. At least in opposition one can get up and make a speech and criticize a policy or advocate a new vision or direction. Government members cannot do that to the extent they should because of the power of the Prime Minister's Office. The PMO and the PCO have the power to appoint cabinet ministers, committee chairs and parliamentary secretaries. They decide different trips, appointments and positions of influence.

That system must end. It must change if parliament is to be more relevant in the future. We need fewer confidence votes. The only confidence votes should be on budget bills, money bills, and things of importance like the throne speech which lays out the vision of the government for the next parliamentary session. Those things must change.

Committees must have more independence. We elect the Speaker of the House of Commons by secret ballot and the whips are not on. We have now had at least two Speakers who were probably not the favourite of the Prime Minister of the day. I am not talking just about this Prime Minister, but former Prime Minister Brian Mulroney. Members voted freely for the person they thought could best fill the duties of the Chair.

We cannot even take that principle to committees of the House of Commons and freely and secretly elect the person we think should chair the committee. My God, how timid we are in the House of Commons.

I will give another example. Just yesterday in the finance committee we were studying Bill C-8. It is the most voluminous bill in the history of the country. It the financial institutions bill. It has 900 pages and affects about 1,400 pages of statues. It is a very big bill and a very complicated bill. One of its recommendations is to set up a new consumer agency. There is supposed to be a commissioner of that consumer agency appointed by the Minister of Finance.

I moved a tiny amendment that said before the appointment of that commissioner of the agency, the name should be referred to the finance committee to have a look at that, not to ratify it, but to have a look at it and express an opinion. Every single government member voted no. Every single opposition member voted yes. We could not even empower ourselves to have a look at the minister's suggestion before the minister appointed that person. What a minuscule almost irrelevant piece of parliamentary reform, and yet we have the stupidity in this place to be so polarized.

Where the Prime Minister's office cannot control each and every thing that happens, then it is no good. I saw intelligent and highly educated men and women who went to that committee yesterday and voted nine to zip in opposition of that minuscule step. I know that probably seven of those nine would have liked to have taken that little step to reform this parliamentary institution, but they could not because of the kind of system we are locked into.

The only way it will change is if government backbenchers empower themselves and if we opposition parliamentarians empower ourselves and say no to the government from time to time, like they do in Great Britain and like they do in almost every other democratic country around the world.

There is no reason why parliamentary committees should not have more independence to initiate legislation and the independence in timetable of legislation. There is no reason why a parliamentary secretary has to come to a standing committee as a member of that particular committee and dictate how to vote on each and every single amendment.

The bill we talked about yesterday, Bill C-8, is a big bill. Hon. members should ask the member for Elk Island how long it took the finance committee to consider it yesterday. It took maybe an hour and a half. It was a futile exercise, because every single amendment that the opposition proposed, the parliamentary secretary, who was the first person recognized, would say no. All the government members voted no. All the opposition voted yes. The only amendments that were accepted were government amendments. Again, only the parliamentary secretary spoke to them. What kind of parliamentary system is this?

We have to change the system to make it more relevant. No wonder people are growing frustrated. No wonder they are not voting or participating. They rank politicians close to the bottom of the totem pole in terms of respect in this country. These are the kinds of things we should look at.

We should look at more permanent membership on parliamentary committees. We see this revolving door on these committees, mostly on the government side but not exclusively on that side. We need more permanent membership so people develop some expertise, some independence, some backbone and some gall.

I look at my friend across the way who was a respected member of the national assembly. I know he has a strong feeling about reforming this place. I know that from all the articles which were written about him two or three weeks ago in the press about making this place more meaningful. If people would think like he does and then put into action the feelings that he has, we could make some meaningful reforms in this institution.

In my last minute I want to talk about the whole question of appointments. I do not think there is any democratic country in the world where the prime minister has so much power. The Prime Minister appoints the head of the national police, the RCMP. He appoints all the justices of the supreme court. He appoints the head of the military. He appoints all the cabinet ministers. He appoints all the senators. He appoints all the heads of the crown corporations. He appoints all the heads of the important boards and agencies. He appoints all the lieutenant governors. In addition to that, he appoints thousands and thousands of people to boards and agencies.

As a result, we often get a lot of people who should not be sitting on those particular boards and agencies. There is no vetting or venting of the process by a parliamentary committee. In many cases a parliamentary committee should have the authority to either ratify or reject the nomination of the Government of Canada. What is so radical about that? At the very least, the Parliament of Canada, through a relevant committee, should review many more of these appointments.

Parliament itself should have more timetables. We should have a timetable to set throne speeches, set budgets and a fixed election date to take that power away from the executive and the Prime Minister of Canada, and put more power back into the hands of the people through their elected representatives, the people elected in all parties in this House.

Standing OrdersGovernment Orders

February 26th, 2001 / 1:25 p.m.
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Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Mr. Speaker, I recognize that and I think we should debate this longer. I do not think we should quit at 2 o'clock today. It is up to the government to bring this back and then everybody will have their say?

This is such an important issue that I think I am well within my means to debate. It is the first time in my whole career that I have been able to speak without a time limit. I do not mean to take it out on my other colleagues, especially those on this side of the House but also on the other side. If any of them want to speak, I would urge them to make sure that the House leader brings this issue to the House again. Let us debate it. Let us have the procedure and house affairs committee debate these things and get down to the root of the cause and not deal with how we can handle the hammer here.

It is very important for us to deal with these issues in a rational way. Instead of the government allowing debates and free votes in committee and debates and free votes here, which would solve the problem, it is saying that it will not permit us to bring in amendments that it thinks are frivolous. In other words, if the only purpose of it is to try to draw the attention of the public to the issue, then that is not a proper use of parliament.

I happen to disagree with the government. If we had not done what we did on the Nisga'a agreement there would not have been as many people informed about the issues as there are now. It did serve a purpose, albeit a secondary purpose, because the primary purpose was totally derailed by the government House leader and a government that would not listen to our reasoned debates.

We hear occasionally from the other side that we on this side are obstructionists. I know the words have been applied to Bloc members. They are called obstructionists when they want to discuss the Young Offenders Act. We have been labelled that way too.

I want the people listening to know and I want all members here to know that we are a responsible official opposition. We oppose things which we believe need opposing. We stand in favour of things which we think should be supported. I am not sure about this, but I think the present official opposition is unique in that it has voted for more government bills and motions than other oppositions before us.

We have supported around 50% of government measures. I am talking, for example, about Bill C-8, the new bank bill. Primarily we support it. There are some small areas where we wish there would be some amendments, but we are not an opposition that is here merely for the sake of being in opposition. We want to be and we are a constructive opposition pointing out to the government where motions need correction and offering positive solutions for correction.

If there were a free vote over there and we failed to persuade them intellectually or by debate or parley, and they voted against it, I would say that I guess we lost that battle. However if I am able to persuade them and they say to me individually that they are persuaded but then vote against it, I am frustrated. I feel the purpose of parliament is being thwarted by that kind of basic philosophy of the way parliament works.

I have a lot to say. I do not feel like ending. I know that I have spoken about an hour now. Whereas some other members would have to stop for a lunch break, since I have a reasonable bank account on which to draw I do not really need to do that. It is only 1.30 p.m. so I think I will just say a few more things which are on my mind.

I want to point out something of greatest importance. How do I say this without it coming back to me? I do not like to use the word arrogant because when we call someone arrogant somehow just saying it reflects back on us. I do not mean it as a pejorative term. I use the word arrogant to describe government members in the sense that they are isolating themselves from the people and discounting the necessity of being responsible to the people who sent them here. They do not believe in the basic elements of democracy and of representative government. That is the whole reason for this.

If I could very frankly summarize what I have been trying to say in the last little while, I would put it this way: A mallet is being used to kill a microscopic gnat because we are not willing to look at the source of the gnat. The source is that the government will not permit true, open, free debate and votes, especially in committee.

Committees should have the freedom to work through a bill or a motion and to improve it on behalf of Canadians. If by debate I can persuade my fellow members, I am incensed that the system here prevents them from supporting it with their vote. I really am. That needs to be corrected. That is the nub of the issue.

Furthermore, the government has used time allocation in the House over 70 times now. It is a record breaker. The government uses it routinely. As I said earlier, it brings in time allocation before a stage of a bill has even been introduced. It announces time allocation in advance so it can do it on the first day. I use the word arrogance in an intellectual meaning, not a pejorative meaning, when it ignores the rights of parliamentarians to debate the issues.

The Liberal minister of public works agrees with the principle of the amendment. He recommended in the 81st report of the House management committee in 1993 a change to the standing orders. I am talking about our present minister of public works.

He supported the motion recommending that time allocation and closure motions could be moved unless it appeared to the Speaker that such motions were an abuse of the standing orders of the House or an infringement of the rights of the minority.

If we look at the actual amendment which was read into the record earlier, and much to the joy of my colleagues I will not read it again, basically it says that if we use a means that is available to make our voices heard when the government in its arrogance will not hear, then the Speaker, according to the government House leader, will have the ability to disallow the amendments.

It is the position of the Chair of this place to ensure that parliamentarians have the opportunity to represent their constituents in vote and in debate. The task of the Speaker is being changed by the motion. That will bring the Speaker into the realm of the government side to control the debate further than it is now.

In 1993 the minister of public works supported the motion, with this provision: “unless it shall appear to the Chair that such motion is an abuse of the rules of the House, or an infringement of the rights of the minority”. It is the job of the Speaker to ensure that members of the opposition have their full rights in this place to represent their constituents and like-minded constituents across the country who perhaps do not have a member of the opposition in parliament.

We get thousands of letters from people across the country who write to the official opposition because the government is doing things that they believe are wrong. They want us to draw attention to those things and to correct them. We represent those people as well.

If the government invokes time allocation on the legislation and we are forced to stop speaking to it, the people of the country will be ill served by this motion. I appeal to all Liberal members sitting in their places, real or imaginary, to think carefully when they vote. Undoubtedly they will be told by the Prime Minister and his minions that it is a confidence vote. He will tell them that an election will be required if it is not passed. I assure those members that is garbage. It is not true.

Let them think the issue through. Let them vote with their conscience. Let them vote with their heads. Let them vote freely. Let them throw off the shackles that have prevented them from being effective parliamentarians ever since they were elected. We ask them to vote against the motion.

In closing, I am going on the assumption that the bill will be rammed through by the majority government. In my attempt to improve it so that it is less unpalatable and less offensive, I propose the following amendment:

That the motion be amended by adding:

“and for even greater clarity, the Speaker may select for debate all motions, regardless of their nature, if in his or her opinion the rights of the minority have been infringed upon in any way.

Financial Consumer Agency Of Canada ActGovernment Orders

February 13th, 2001 / 6:55 p.m.
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The Speaker

The House will now proceed to the taking of the deferred recorded division on the motion at second reading of Bill C-8.

Business Of The HouseGovernment Orders

February 13th, 2001 / 4:50 p.m.
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Liberal

Marlene Catterall Liberal Ottawa West—Nepean, ON

Mr. Speaker, discussions have taken place between all the parties and I believe you would find consent for the following:

That the recorded divisions scheduled today at the conclusion of government orders take place in the following order:

All necessary questions to dispose of the supply day motion in the name of the Leader of the Opposition.

All questions to dispose of second reading of Bill C-2.

All questions to dispose of second reading of Bill C-8.

The main motion concerning the Address in Reply to the Speech from the Throne.

I understand there will be another motion, a pro forma motion, once the motion has been adopted.

PrivilegeGovernment Orders

February 13th, 2001 / 11:20 a.m.
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NDP

Bill Blaikie NDP Winnipeg—Transcona, MB

Mr. Speaker, I thought I might assist the Chair by reflecting on some of the arguments that have been made so far.

It is said that politics makes strange bedfellows. This is no less true of procedural arguments when we find the Alliance House leader citing myself, the Bloc House leader citing Pierre Trudeau, and finally, even more interestingly, the government House leader citing the Leader of the Opposition and seeking refuge in the actions of the Leader of the Opposition when he was in the Alberta legislature for what the government is doing today.

This is certainly the strangest of the arguments that we have heard, because it may well be the case that the Leader of the Opposition had an affinity for closure when he was in the Alberta legislature. When it comes to closure one could say of almost all governments that we have all sinned and fallen short of the glory of God when it comes to time allocation and closure, particularly those who have had the experience of government.

However, two wrongs do not make a right and a hundred wrongs do not make a right. Every introduction of time allocation and closure has to be judged on its merits That is what we are asking the Chair to do. There is time allocation that comes after lengthy debate and there is time allocation that comes after insignificant or insufficient debate.

I believe that what we have developed in this parliament, which I think is grounds for the frustration we find here today, is a tradition of introducing time allocation after insufficient debate. Major measures are introduced in the House but the government is very impatient. It would have been unthinkable at one time, as the House leader for the Bloc pointed out, for something as significant as this to be time allocated after only a day or two of debate.

Debate is not something to be avoided in this place. Some may have noticed that we have on the wall out there in the NDP part of the lobby a quote by the former dean of this House, the member for Winnipeg North Centre, Stanley Knowles, who said on December 10, 1968, probably in a debate about procedural reform or on a point of order:

Debate is not a sin, a mistake, an error or something to be put up with in parliament. Debate is the essence of parliament.

All the opposition asks is that when we deem it appropriate, we be allowed to debate things for a sufficient period of time. What we are asking for in this parliament is certainly not a pattern of obstruction.

I remind the Chair that yesterday a bill of 900 pages in length passed this House in one day of debate and went to committee, just as the government asked. So this is not a pattern of the opposition saying that the government cannot do its business, that we will tie up the house of Commons and nothing is going to happen. That is not what we are talking about here. We are talking about one bill, a very significant bill having to do with changes in employment insurance, and various opposition parties are saying that they want to debate it a little while longer, that they have some concerns they want to put on the table.

When another bill, a significant piece of legislation in anyone's judgment, Bill C-8, the financial services sector legislation or whatever it is called, which is, as I said, 900 pages long, is debated in this House for one day and sent to committee, there is no pattern of obstruction there.

I believe, as I have argued before, that the Chair does have and should exercise the power to restrain governments that are time allocation happy, shall we say, and this is certainly a government that falls into that category.

It makes it all the more ironic that the government House leader should cite what happens in Westminster. Westminster is an entirely different situation, but if the government wants to talk about Westminster, then let us talk about the power that the Speaker has at Westminster when it comes to time allocation. We only got one side of the story from the government House leader. I do not think we should get too much into citing Westminster. We have our own traditions in this place, but I think we can learn from Westminster in the same way that we can learn from other parliaments.

We have our own traditions here. We had a tradition in the House that where there was a desire for lengthy debate on a particular bill, that kind of debate was permitted. That tradition has been allowed to erode over several parliaments. This government takes it for granted that it has the right to exercise its perceived right to bring in time allocation after only a day or two of debate and it does not expect to even receive any trouble for doing so.

So, Mr. Speaker, you do have something to consider here. Unfortunately, I think the point is well taken that you cannot do anything about time allocation on this particular bill because the point of privilege was introduced after the vote. Perhaps it should have been introduced before so that you would have had the opportunity to rule on this particular time allocation, because you really cannot rule on time allocation in general. You do have to rule on time allocation specifically. This will, I think, make it difficult for the Chair in this particular circumstance.

However, I have every confidence that we will be here again. Perhaps we will be here before a vote is taken or at the moment at which a motion for time allocation is introduced, which would give the Chair more opportunity to say, depending on the circumstances, that it is a motion he is not going to hear at that particular time because he does not believe the House has been given sufficient time for debate on that particular matter.

Finally, it does not surprise me that the government does not want to have a great deal of debate on this. Maybe it does not want Canadians to know in any great detail, thanks to the speeches by opposition members, just what is in the bill and what is not in the bill. Maybe it is embarrassed by the fact that it has been literally robbing the unemployed for years and years to pay for its surplus. It has been on the backs of the unemployed and at the expense of the benefits that once would have gone to unemployed people that the government has achieved its so-called fiscal successes. Perhaps that is something that it would rather not talk about. In that context, we fully understand the guilt that has driven the government to this procedural extreme.

Financial Consumer Agency Of Canada ActGovernment Orders

February 12th, 2001 / 5:30 p.m.
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Bloc

Richard Marceau Bloc Charlesbourg—Jacques-Cartier, QC

Madam Speaker, first I want to congratulate you on being appointed Deputy Chairman of the Committees of the Whole. I wish you all the best when you are called upon to referee our debates, which tend to be raucous at times. I know you are passionate about and attentive to the proceedings of this House, so I have no doubt you will do a very good job.

I feel like I am watching an old movie. Bill C-8, formerly Bill C-38, is one of these old movies being shown in the House these days.

We heard the same arguments a few months ago, the same issues were raised, and the same positions seem to be more entrenched now.

During the debate on Bill C-38, now Bill C-8, Bloc members had expressed several reservations regarding the bill, which were shared by the Deputy Premier and Minister of Finance of Quebec.

Mr. Landry had stressed four main points. Before Bill C-38 was introduced we had been told not to worry. They were going to deal with it, everything would be all right, our concerns would be addressed.

We were somewhat surprised—I would even say disappointed—to find the elements we wanted to see not in the bill itself, or in any piece of legislation passed by the House, but in the regulations that will be appended to the bill.

As members know, unlike a bill that must be amended by this House in order to be changed, regulations may be amended at will by the executive or the Minister of Finance.

Finally, we are being asked to trust this government and in particular the Minister of Finance and to hand over a blank cheque. You will understand that we have some difficulty with that, to say the least.

Bill C-8 gives full power to the Minister of Finance to decide on his own the fate of Quebec banks without providing any guarantee in connection with Quebec's distinctiveness. Heaven knows Quebec is different. The bill provides no specific measure.

Although I do not always share the very 1960s rhetoric of my NDP colleague, who said “wicked Americans, wicked capitalists, let us turn the world upside down”, I agreed with him nonetheless on certain points, including the importance of giving the disadvantaged, who are often left out, greater access to financial services.

Finally, Bill C-8 has no answer to the very well directed questions of my colleague from Hochelaga—Maisonneuve on community reinvestment.

My colleague from Hochelaga—Maisonneuve, we will remember, is the excellent representative of a region on the island of Montreal hard hit by poverty. He has introduced many good ideas on community investment—I will return to them—which, unfortunately were not included in Bill C-8. That is regrettable.

We can only be concerned by the fact that a single shareholder could, with the agreement of the Minister of Finance, hold 65% of the shares of the National Bank, the largest Quebec bank. It is the bank of the Quebec small and medium businesses. There is an economic model in Quebec, and the National Bank is one of the cornerstones of this model, based on entrepreneurship and the SMBs. Should Quebec lose control of as important a financial institution as the National Bank, I think it would be very bad for its economy.

We also need legislative guarantees against any negative impact these new ownership rules might have on the employment of professionals, consumer and small business services, decision centres and the role of Montreal as an international financial centre. The stakes are just too high for Quebec and its economy to be left to the sole discretion of one man, the Minister of Finance.

We want to make sure—and I would say our whole position on Bill C-8 is based on this argument—that the future of Quebec's banking system is not in the hands of one man. I think most people would agree with that. Giving anybody too much discretionary power is bad; giving a federal minister too much power over Quebec's economy is even worse.

Bill C-8 does not show a firm willingness to protect consumers, particularly low income consumers, on the part of the government. The bill provides for the establishment of the financial consumer agency of Canada. I have my doubts about the kind of authority such an agency could have in an economic climate which, unfortunately, does not look too rosy, as we know, as the United States are about to be hit by a recession. We must ensure that not only middle income people but also low income people have access to financial services. Unfortunately, Bill C-8 remains vague and has more wish than real policy with regard to accessibility and consumer protection.

Finally, I would like to return briefly to the importance of reinvesting in the community. As I said earlier, the member for Hochelaga—Maisonneuve introduced a bill in the last parliament which would have required financial institutions to reinvest in the communities in which they are located. It was based on the community reinvestment act, American legislation—so we cannot be accused of being leftist.

As my colleague said, this legislation would require a regulated financial institution to show that its branches serve the deposit and credit requirements of the community for which they are chartered. This is where this issue becomes very important for, as my colleague said, and I stress this point, branches have an obligation to help meet the credit needs of the local communities for which they are chartered.

In a global context, with people looking at the broader picture, there is also a tendency to move closer to one's own neighbourhood and community. While we believe that the Canadian financial system must be strong and able to withstand the buffeting of the global economy, this globalization must not leave out individuals and entire neighbourhoods who are unfortunately ignored in the rush to prosperity.

In conclusion, I strongly urge the government to include the four points we raised during consideration of Bill C-38 not in the regulations, where they would be subject to the discretion of the Minister of Finance, but in the actual legislation which will be passed in the House. I also urge it to include the main features of the bill on community reinvestment introduced and strongly defended by the member for Hochelaga—Maisonneuve.

With these inclusions, the government could expect a much more co-operative attitude from the Bloc Quebecois.

Financial Consumer Agency Of Canada ActGovernment Orders

February 12th, 2001 / 4:45 p.m.
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Bloc

Suzanne Tremblay Bloc Rimouski-Neigette-Et-La Mitis, QC

Madam Speaker, I am pleased to take part in the debate on Bill C-8, an act to establish the Financial Consumer Agency of Canada and to amend certain acts in relation to financial institutions.

This bill replaces Bill C-38, which as they say died on the Order Paper when parliament was dissolved last October, after the Prime Minister decided to call an early election, having not yet completed four years of his mandate.

To begin with, this is essentially the same bill. Bills C-38 and C-8 are twins. But they are not identical because, in addition to a few minor amendments to ensure a closer match between the English and French texts, there is a major change with respect to the demands made by the Bloc Quebecois and by Bernard Landry, Minister of State for the Economy and Finance and Deputy Premier of Quebec, a change which would ultimately make the bill more acceptable by adding amendments anyway.

I was saying that the federal government decided to respond in part to the demands and expectations expressed by minister Landry by incorporating in its bill four points the Government of Quebec felt were important. However, these points were incorporated not in the bill itself, but in the guidelines on the reclassification of the banks listed in schedule 1 whose equity capital is under $5 billion.

The guidelines that accompanied the release issued on the day the Minister of Finance introduced his bill, clearly stated that, and I quote:

Any transaction involving a recategorization will be considered on its own merits, and should demonstrate that it would foster opportunities for the bank to grow and better serve the customers of the bank.

In considering whether a proposed transaction involving a recategorization is in the public interest, the Minister shall take into account all matters that the Minister considers relevant, including:

safety and soundness of the bank;

direct and indirect employment;

the location of the mind and management of the bank;

needs of consumers;

businesses and operations of the bank;

and prospects for the bank in the context of the global marketplace.

However, since these elements were not included in the act, they could be changed by the minister who could, for example, yield to the pressures of powerful international lobbies.

That being said, I must say without any hesitation that Bill C-8 raises many questions in my mind. When I think about what I have seen and observed with this government over the past eight years, I am concerned. I am concerned by, among other things, the government's arrogance, its contempt for democracy, its inability to fulfil its own promises and by the ease with which it yields to the pressures of the well-to-do and crushes the poor. I could go on and on, because there are so many reasons to be concerned about this government.

Let us take a look at a few things that are scary in this bill.

Bill C-8 gives full power to the federal Minister of Finance to decide, alone, the future of Quebec banks.

With Bill C-8, the Minister of Finance will be able to decide alone, at his own discretion, the future of Quebec banks. I find it truly unacceptable that this discretionary power is as strong as if not stronger than the act itself.

The Bloc Quebecois is concerned that a single shareholder could, with the agreement of the Minister of Finance, own 65% of the shares of the National Bank, the number one bank in Quebec. There is no need for the Minister of Finance to authorize this excessive control to ensure the flexibility of the National Bank. How is it that a shareholder owning 65% of a bank will give it more flexibility than 65 shareholders owning 1% each?

We need legislative guarantees against any negative impact these new ownership rules might have on employment, for example, on consumer services, on small business services, on decision centres and, most of all, on Montreal's role as a hub in the area of international finance. The stakes are just too high for Quebec to rely on only one person, the federal Minister of Finance, especially since Bill C-8 offers no real legislative guarantees. As I said earlier, the bill does nothing more than list some elements to consider that do not go far enough and that are under the sole control of the Minister of Finance.

Even worse, it seems to me that the finance minister's bill is full of holes which should be cause for concern to any person of goodwill. Why must the government write such thick bills if it does not seek clarity? How will this government be able to judge the clarity of others if it is incapable of seeing its own lack of clarity? One factor which contributes to clarity is precision. See for yourselves. On page 55 of the bill, clause 385 sets out the public holding requirement for banks. However, we learn a little further on, in clause 388, and I quote:

On application by a bank, the Minister may, if the Minister considers it appropriate to do so, by order exempt the bank from the requirements of section 385, subject to any terms and conditions that the Minister considers appropriate.

As well we see that the provisions of the act cease to apply if the minister so decides. In other words, this is a bill with flexible parameters, one that will allow Ottawa and the Minister of Finance to decide unilaterally on the future of the National Bank.

It is not obvious that the federal Minister of Finance's bill as presented will ensure healthy competition in the national market. Yet this competition is more important to future economic development than striving to be bigger internationally.

But the Minister of Finance has decided to make legislation in favour of the big banks, even if by so doing he has to sell out the banks of Quebec, including the National Bank, the one known as the bank of small and medium size business in Quebec.

When I think of the way certain individuals, including the Minister of Intergovernmental Affairs and member for Saint-Laurent, want to see Quebec suffer, I tell myself this is a really powerful weapon in the hands of the federal Minister of Finance, if ever the federal government decides to act.

In this case I say to my fellow Quebecers, here is another really good reason, just one more, to create our own country, so that we can make our own decisions on what we want to do with our banks.

As regards consumer protection, the Minister of Finance remains vague and expresses more wish than real policy.

Bill C-8 will establish the financial consumer agency whose purpose, according to the finance minister, will be to protect consumers.

The Bloc Quebecois is and has always been a protector of human rights and citizens as evidenced by the debate held in this House on Bill C-54 that dealt with the protection of personal information and died on the order paper in 1997 to be reintroduced as Bill C-6 and given royal assent on April 13, 2000.

I want to remind the House that Quebec already has several laws protecting consumers. For instance, there are the consumer protection act, the privacy act, as well as all the legislation on insurance companies, trust companies, savings and credit unions and securities.

This new agency will only create duplication in regulations, given all the measures that have already been taken by the Government of Quebec in this area which, need I remind the House, is under provincial and not federal jurisdiction.

The finance minister takes the credit for including in Bill C-8 a measure, the low-fee retail deposit account, as described in section 448.2, that would provide low income people greater access to financial services.

With regard to this famous low-fee retail deposit account, nobody except the minister knows exactly what it is all about. Nobody knows what are the prescribed characteristics mentioned in this clause and which would entitle an individual to a low-fee retail deposit account. Nobody except the minister of course knows whether such an account will be available everywhere, in every bank in Canada and Quebec.

How is it that, as we are talking, the minister is the only one who knows the answer to all these questions? It is very simple. The minister is the only one who knows, because all these issues will be defined in the regulations. As we are having this debate in the House, we do not have a clue about what will be in the regulations.

True enough, if the regulations had been made an appendix to the bill, it would have increased the thickness of an already voluminous piece of legislation. For the time being, all we have to go by is the minister's word.

Once bitten, twice shy, however. Members of this government have made so many promises during three election campaigns, in 1993, 1997 and 2000, without keeping their promises or being true to their word, that I must say the fine words from the Canadian Minister of Finance are not enough to be able to categorically state that consumers will be better protected under this new law.

I also question what is in the bill regarding branch closure; I wonder what will happen with the reduction in services available to consumers. The only measure provided by Bill C-8 is that a bank must give a four month notice before closing a branch.

Before, people learned about the closure the very morning their branch was to close. With the finance minister's bill, they will know about it four months ahead of time.

With this bill, the government can do precious little to prevent, through legislation or coercion, the anticipated closure of a branch. With a clause that is so unrestrictive, how can one claim, like the finance minister does, that this bill will improve access to financial services? The minister is the only one who can have this kind conviction and optimism.

Bill C-8 does not provide any concrete measure to ensure greater access to financial services for the poor. That would have been a step in the right direction. The minister should know by now that there is a real problem there. He could have made use of the bill introduced by my colleague and friend, the hon. member for Hochelaga—Maisonneuve, in the second session of the 36th parliament. The bill was entitled an act to amend the Bank Act and the Statistics Act (equity in community reinvestment). Its main goal was to ensure that certain branches of banks take measures to facilitate access to credit for persons who have a residence or a place of business in a federal electoral district in which the branches are located.

Bill C-8 does not give any guarantee that the minister will take into consideration the specificity of the financial system in Quebec. Madam Speaker, if you and I could have a conversation on the subject, I am almost convinced that you would tell me “The hon. member is well aware of the fact that the minister is himself from Quebec, and he takes Quebecers' interests to heart”. I would regretfully have to tell you that the minister is indeed the member for Lasalle—Émard, but that he ignores or purports to ignore that Quebec is a people whose financial system has its own specificities, and that the minister in no way takes that into account in Bill C-8.

I might add that we would have this conversation if you did not hold your present position. I know that you now have to be of the utmost neutrality. But if you were a backbencher, as I am, we could have had this little chat.

My colleagues, the members for St. Hyacinthe—Bagot and Drummond, who are finance critic and assistant finance critic, respectively, will propose amendments to Bill C-8 on behalf of the Bloc Quebecois to counter the inequity towards Quebec's major banks. I hope the extended Liberal caucus from Quebec will keep its promise of standing up in Ottawa for Quebecers. To this day, this caucus has given its support to the government each time it has introduced bills going against promises made during the recent campaign. Will I be forced, once more, to conclude that the population has been misled? I am waiting for proof and it is much too long coming.

Financial Consumer Agency Of Canada ActGovernment Orders

February 12th, 2001 / 4:40 p.m.
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NDP

Judy Wasylycia-Leis NDP Winnipeg North Centre, MB

Madam Speaker, the member for Winnipeg Centre raised a very important issue that must be addressed by the House as we pursue Bill C-8. The issue has been invisible to date, and I am surprised that more members are not speaking up about the impact of bank closures on their communities.

I am talking about rural communities, isolated northern communities, inner city older neighbourhoods, and whole communities that have been abandoned by the big banks and that do not seem to be addressed in the legislation.

The member for Winnipeg Centre and I have experienced numerous bank branch closures over the last several years. Low income residents, senior citizens and small businesses are not able to get the services they need and deserve.

Would the hon. member have any suggestions for the government to improve the legislation? Would he support the idea of a moratorium on bank branch closures until such time as we can put in place proper mechanisms for addressing profitability and community viability? Would he agree with the idea enunciated by our colleague from Regina—Qu'Appelle about some form of obligation on the part of the banks to reinvest back into the communities that gave them their position of profitability in the first place?

Financial Consumer Agency Of Canada ActGovernment Orders

February 12th, 2001 / 4:15 p.m.
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NDP

Pat Martin NDP Winnipeg Centre, MB

Madam Speaker, I am glad to have the opportunity to join the debate on Bill C-8. As has been pointed out by previous speakers, the bill is a reincarnation of Bill C-38 which died on the order paper last fall at second reading.

We can tell by the amount of debate in the House on this bill already today that there is great interest among all Canadians to see reform of our financial institutions and the whole financial sector. This stems from a growing feeling on the part of Canadians that our current financial institutions are failing to meet the needs of the average Canadian.

There is a growing sense that our chartered banks, which most people grew up with as symbols of stability, that they were something to be proud of and which were given charters for specific reasons, are failing to meet their mandates under the terms of which they were given their charter.

We all know that the five chartered banks have an exclusive monopoly on certain financial transactions, for instance, the right to process credit charges. These profitable transactions are huge. This is a sector that they have been given exclusive right to and the trade-off was that they would meet the needs of the average Canadian community and the average Canadian citizen for their basic financial services.

I can begin by saying that in the riding of Winnipeg Centre that has been anything but the case. In fact, there has been a flight of capital from the inner cities across the country, Winnipeg Centre being no exception. There is almost a seemingly vote of non-confidence in our communities as people watch these institutions fold up their tents, leave and not provide the basic services that they were charged with the responsibility to offer. In fact, they are doing anything but that. As was pointed out by the previous speaker, small businesses are not given a loan unless they can prove that they do not need it.

More and more of the basic financial services, such as having a neighbourhood branch within a reasonable distance for senior citizens or people of low income, are getting to be a thing of the past. These services are being taken over by ATMs or by large corporate branches that may be in the centre of the financial district, but they are not in the communities and they are not in the small towns in and around rural Manitoba.

There has been a growing resentment over this trend of bank closures. This came to light a couple of years ago when the banks were anxious to merge to form even larger institutions. Many Canadians mobilized at that time, specifically to stop the bank mergers. However, other realities came to the forefront. There has been a growing frustration with not only the lack of services in the communities. It forced Canadians to have a really serious hard look at what our major financial institutions were or were not really doing for us.

It has even mobilized people who own shares in the various banks. There is a growing shareholder movement among people who own shares in the five chartered banks. I had the privilege of going to two of the national shareholders' meetings recently. I never thought in my wildest dreams that I would be going to a shareholders' meeting of the Royal Bank or the Bank of Montreal. I do not own shares in either of those institutions, so I had to borrow some proxy votes in order to crash the gates and get in.

Our point was that at a time when the banks seem to be operating on their own and without any input from the Canadian people who cause them to be, we needed to seize the issue somehow and put a little bit of democracy back into the corporate system. In other words, if we were unable through our elected institutions to coerce the banks into doing their job of servicing Canadians, perhaps if we mobilized through a shareholders' rights movement we could coerce the banks into doing the job that they were hired to do or they were given the exclusive right of some financial transactions in exchange for.

It was rather interesting. I do not know, Madam Speaker, if you have ever been to a shareholders' meeting of one of the major chartered banks. Probably many of the people in the room have. I certainly had not. I was very surprised that as many as 1,400 people crammed the hall in a major hotel in downtown Toronto to attend the meeting. I thought it would be like other meetings of its type that I had been to, like union meetings where people would move a motion, have it seconded, debate it and the motion would either pass or fail based on its merits.

In actual fact, nobody there seemed interested in talking about very much except for the actual returns of that quarter of that actual fiscal year that was being reported on. We went there with a number of people who moved real motions that we thought would benefit the average Canadian. There were only nine resolutions put forward in the whole meeting. We moved all nine and I seconded all nine.

One of the resolutions was to limit the salary of the CEO of the bank to ten times that of the average employee, which he thought was kind of an innovative move. It was quite a fair resolution too when one thinks about it. If the average employee makes $40,000 or $50,000 a year working for the banks, the CEO would then get 10 times that or $500,000 or $600,000 a year. We would think that is pretty fair compensation.

That motion did not pass. We seconded it and argued it aggressively as to why that would be more fair. We even pointed out that the average CEO of a Japanese corporation makes 10 to 13 times that of the average worker of the enterprise over which they govern. In the case of the bank presidents of the Royal Bank and the Bank of Montreal that figure is 80, or 90 or 120 times the earnings of the average employee. Those are wildly and grossly inflated salaries to reward these bank presidents for doing what? For cutting off access to services for average Canadians. This seemed to be their reward.

Granted there were record profits involved and quarter after quarter they were making more money, but all the time they were raising service charges, closing bank branches and denying basic services like loans to small businesses. No wonder they were making a profit and rewarding each other very handsomely.

When we looked at that structure, no wonder they were voting each other big raises. They all seemed to sit on each other's boards of directors. I learned a lot when I crashed that shareholders' meeting. As a socialist and a trade unionist, attending a shareholders' meeting like that was a real education.

We learned that one of the boards of directors of the bank, I believe the Royal Bank, George Cohon, the CEO of McDonald's, sits on 50 other boards of directors. Each one of those boards meets about 10 times a year. That is 500 board meetings a year that presumably one would have to attend, but nobody can do that. The only board meeting one really has to go to is the board meeting when they vote on a raise for the board of directors. Then the other members of that board will come to that board of directors meeting and vote for a massive raise.

It becomes an incestuous little circle of people who vote each other massive pay increases. That is what motivated us to try to interfere with that whole circular process and cap it off. Whatever rate of pay one is paying one's employees, one can pay oneself 10 times that, but that is enough. Frankly, we do not believe that banks deserve to be rewarded for cutting off access of Canadians to basic banking services. That is one of the shortcomings that we pointed out.

Another motion that we moved demanded gender parity on the board of directors; 50:50, female to male. We came close on that. It is really ironic that the person that moved the motion was a famous Bloc separatist named Yves Michaud. He is the person whose motions I was seconding. The results of that vote were exactly the same result as in the last Quebec referendum, 49.6 to 50.4. There is something about that number that Yves Michaud seems to generate in people. I do not know if it is because he moved it. Perhaps I should have moved the motion myself. We thought that was a good idea. There was a great deal of interest.

One of the other motions that we moved was the very thing that I pointed out with the increasing of CEOs wages, salaries and compensation. Due to the fact that they all sit on each other's boards of directors, we also moved a motion that would limit the number of boards one could sit on to 10. If they all want to sit on each other's boards, let us make it a reasonable number. In this way we hoped to somewhat democratize the corporate structure and give the people who actually rely on the bank's services to some say on what the banks do or do not do.

In my riding of Winnipeg Centre, we have seen bank branches close in an almost epidemic way. The same is true for my colleague from the riding of Winnipeg North Centre. The banks are shutting down branches like there is no tomorrow in the hopes to increase their profits even more. The trade-off was supposed to be that we would give them the exclusive right to certain financial transactions in exchange for reliable adequate service and even some accountability to the community at large.

For instance, in the United States there is a community bank investments act which mandates that banks reinvest a certain amount of their profit into the community that they serve, even if it is not the most profitable venture, or a break even venture or marginal venture. If it is something of community interest, a non-profit group that wants to get started but is short of capital, the banks would be mandated by the community investment act to invest in at least some of these things to move the community forward for its own benefit.

Bill C-8 does one thing. It helps the credit union movement. I should say something positive about that. Many of those people are so disillusioned with the service, or lack of service, that they have been getting from the chartered banks. They have been gravitating toward the credit unions in order to get access to the financial service that every family and small business need.

One of the positive aspects of Bill C-8 is that it will finally allow a national structure for the credit unions, a credit union central, so that they would be recognized as an entity that way. We think that is a very positive step. We see it province to province. We have a Manitoba credit union central. Now there can be a national structure along those lines.

However, the shortcomings far outweigh those small benefits. Canadians are looking to the banks for support for the most basic of services and are being denied them. In a time when the banks are showing record profits, one would think that there would be some feeling that they should be able to enhance their service to Canadians instead of continually reducing them in spite of record profits quarter after quarter.

Our position is that the banks have done nothing to deserve being rewarded with the additional freedoms they would enjoy under Bill C-8. We believe Bill C-8 would, in a small way, enable the banks to achieve what they failed to achieve recently under the bank mergers. It almost institutionalizes the concept that banks will eventually merge, in that it specifically talks about that eventuality and the possibility it would be dealt with in parliament.

Instead of being dealt with on a random ad hoc basis, it more or less contemplates that mergers sooner or later will be a fait accompli. Canadians recoiled at the whole bank merger idea. The society of seniors spoke out vehemently that they were concerned that if banks were allowed to merge further and get even bigger, their interest in serving the small homeowners or small businesses would be even less.

We all know that much of the profit the banks are making now is really from their offshore and corporate customers, not from the average citizen and the small mortgages that homeowners might enjoy.

Another thing that comes to mind, and I wish we had thought of it at the shareholders' meetings of the banks, is to protest the fact that when the Minister of Finance outlined the recent round of tax cuts, the announcement that the corporate tax rate will go down from 17% to 16% slipped by without very much notice.

I have heard different figures as to what effect this will have on the chartered banks. One figure that I heard is that as much as $75 million a year will be kept by the banks as a result of that one percentage point change in the corporate tax structure.

I would ask the House of Commons and all Canadians what the chartered banks have done for us recently to deserve a reward like this, a kickback, if we will, of up to $75 million per year that they will now be able to keep above and beyond the record profits that they enjoy quarter after quarter?

One might sense that I am quite critical of our financial institutions. We were hopeful that Bill C-8 would come down hard and advocate on behalf of Canadians. We expected the Canadian government to be champions of Canadians and not, frankly, to cater to the interests of financial institutions and give them the enabling legislation they might need to go through with what they failed to do last year.

Many seniors have visited me in my riding to tell me how disappointed they were that their local bank branch was closing, and they wanted to know why. When they appeal to the banks they get a long, convoluted restructuring message on how the banks will be better able to serve their customers through e-commerce and ATMs, and that now people can bank on the Internet, switch on their home PCs and have all those banking services available to them.

That is not much consolation for a low income senior citizen on a fixed income. The seniors in my riding resent losing what they counted on as being part of their community and part of their neighbourhood. As I said in my opening remarks, it really looks like a vote of non-confidence in a neighbourhood when the local bank branch does not see fit to stick around because it does not sense enough economic activity to warrant keeping its doors open. What does a boarded up bank say about one's neighbourhood and about the viability of the town, the community or the inner city neighbourhood that one lives in?

Some people have called the attitude of the banks toward ordinary Canadians abusive and unaccountable to the community. What we had hoped to see in a bill dealing with financial institutions was a return to that accountability.

This reminds me of a parliamentary junket to Botswana that I was invited on. The outgoing president of Botswana, Masire, was one of those African leaders who really was committed to his community. It was one of those countries that was not corrupt and that worked hard in the post-war era to try to build a nation.

Masire had chartered banks in his country with the exact terms and conditions that we put on ours. That is what he said in a meeting with the minister, which we attended. However, the banks disappointed him and failed to meet their commitments in such a way that he said to hell with them. He said that he was going to invite the whole world to come and bank in Botswana because those to whom he gave that exclusive privilege had failed the country.

I am not saying we are at that point. I am not saying it is quite that drastic for us yet, but there is a growing feeling that we are giving chartered banks the exclusive right to some of the most profitable transactions. The processing of credit cards is one example. Every time a credit card is used the processing fee must be done by one of the chartered banks. If we give banks that exclusive right, we want something in return.

We do not want to see boarded up banks in our communities. We want a commitment to and reinvestment in our communities. Banks should take some of their record profits and do more than just donate to the Winnipeg Ballet or to some other arts program to improve their image. If they gave one-tenth of what they spend on TV advertising, which is a huge campaign to try to improve their image, people might feel compensated for some of what they have lost in service.

There are huge gaps in banking law. There is a real need to address the overall picture and the way Canadians view the banks, whether in terms of providing services, the insurance aspect of things, what the banks have been trying to grab, or all of their financial activities. We need to put the reins on them in some respects.

The bill, thankfully, stops short of giving them all they have asked for in terms of being a single window shopping centre for all financial transactions, whether auto insurance, life insurance or whatever. We have not gone that far.

We want to see that banks with some accountability to the community and not just to their shareholders. If they are to be motivated by profit alone and by no secondary objectives whatsoever, why are we giving them exclusive monopoly on certain transactions?

I predict there will be a growing shareholders rights movement and that more people will be buying 100 shares of one of the banks so that they can crash the shareholders meetings, hijack the meetings and get some of the amendments we put forward through.

If Canadians were polled, they would be horrified that some people make $8 million a year to run one of the chartered banks. The basic salary might only be $1.5 million a year, but when stock options and shares are added up, they are making $8 million to $10 million a year for not really doing their job. Why reward people for failing to do the job they were asked to do?

Financial Consumer Agency Of Canada ActGovernment Orders

February 12th, 2001 / 3:55 p.m.
See context

Canadian Alliance

Gurmant Grewal Canadian Alliance Surrey Central, BC

Madam Speaker, congratulations on your new appointment as Assistant Deputy Chairman of Committees of the Whole. I will be sharing my time with the hon. member for Richmond who is about to make his maiden speech.

I rise on behalf of the people of Surrey Central to participate in the debate on Bill C-8, an act to establish the financial consumer agency of Canada and to amend certain acts in relation to financial institutions.

I am proud to do this because the financial services sector is the largest sector in the British Columbia economy. Our largest banks employ about 26,000 people in British Columbia. Banks in Canada employ about a quarter million people directly and contribute approximately $80 million a year to charities in Canada and about $4.5 billion annually in taxes to our provincial and federal governments.

Despite the contributions that the banks and other financial institutions make, they are a sound foundation as the backbone of our economy. Our banks, trust companies, credit unions, mutual funds, insurance companies and others are very important to our economy.

The bill proposes to address the calls to modernize Canada's financial services industry. Canadian consumers of financial services have demanded a more competitive environment while our banks have been seeking approval to merge and to have more flexibility in the way they structure their operations.

The bill is an attempt to catch up to other countries that have made changes long ago to their financial services industry. The Liberal government has been dragging its feet on this matter for about seven years. This is too bad because our financial institutions must have the ability to make long term plans for the future. Once it is passed into law, we hope the bill will give our banks the opportunity they need to perform long term planning. I doubt that will happen because of the five year sunset clause in the bill.

My colleague from Prince George—Bulkley Valley has a great deal of experience and has been of great assistance to the official opposition working on our financial services policy group. The official opposition wrote a banking report in November 1998 entitled “Competition: Choice You Can Bank On”. The report forms the backbone of our financial services policy. It is a very good and detailed report.

The bill addresses some of the changes we on this side of the House have been pressing the government to enact. The official opposition has been carrying the flashlight to show the Liberals their darkness. After ridiculing our policies they have been stealing them from time to time. We encourage them to steal more of our policies, but unfortunately they do not get them right.

I understand that my colleague on the Canadian Alliance financial services policy group will be pursuing the government with amendments to the bill at committee stage. We hope the government will show some respect for what we propose.

We recognize that a strong financial services industry is essential to Canada's economic well-being. This means we need strong banks, insurance companies and other financial institutions. We need to create an environment for our financial institutions to flourish domestically and have the ability to take advantage of opportunities in the global economy.

Canada has one of the safest financial services systems in the world. We urge the government to ensure that these consumer benefits continue and not be changed or lost.

Outside the House critics of the bill are saying that in the past five years there have been many changes to the world financial system. The bill has been left behind. The bill used to be Bill C-38 which died on the order paper. It does not go far enough to bring our banks up to date with what is going on in the world.

International changes since 1996 are not reflected in the bill that is largely the same as what the Liberals introduced in 1996 but allowed to die on the order paper. They have been trying to pass the bill for far too long. It is out of date in many ways.

There are some who say that the bill is too little too late for our banks and that it will not help to strengthen the performance and competitiveness of our banks at home and abroad. They have already lost ground and they will not be able to make up those lost yards.

Other countries are well ahead of Canada. The United States has allowed its banks to merge with insurance companies. The Liberals insist on leaving it to their finance minister to decide what mergers can go ahead and which cannot.

By lowering the amount of money required to open a bank, we hope that the legislation will allow more banks to be set up in rural areas of Canada. The smaller the capital the more encouragement for institutions to jump into it..

The bill should enhance consumer choice by allowing insurance companies and mutual fund firms to use bank cheque clearing systems. If the banks take over the auto leasing and insurance industries they may hurt our economy since a significant amount of jobs are created by small businesses like car dealerships and independent insurance companies. The further entry of banks into the insurance and auto leasing markets should only be allowed if major auto financing and insurance companies have access to the Canadian Payments Association which they have been requesting. Banks must not have a competitive advantage over auto leasing and insurance companies. There must be a level playing field for all competitors within a given market.

The Canadian Alliance supports the creation of a holding company structure where banks will be able to remove some of their non-banking operations, such as credit card businesses from bank regulations, by establishing separately regulated holding companies. This new structure would allow our banks to compete more effectively against foreign non-bank competitors.

We support increased access to the payments system so that life insurance companies, money market mutual funds and securities dealers will be allowed access to increases in consumer choice.

We support expanding the role of credit unions. I can say that because for about three years, before becoming a member of parliament, I was a director of the second largest credit union in Canada. I saw the environment from the inside. I know that the credit unions are not getting the same support as the financial institutions. They are not only consumer and community oriented, but they also have a good network of branches that help people at the community level.

We are disappointed that this measure is not included in Bill C-8 despite the recommendation in the MacKay report to allow for it. We believe that the government has failed consumers since this measure was seen to be a key point in increasing competition and benefiting consumers of retail banking, that is by the credit unions.

We are concerned about the measures in the bill that would regulate access to financial services. We are concerned about regulating branch closures. This kind of initiative by the Liberals is unnecessary red tape. The banking industry already considers it good business practice to properly justify any bank closures and to give fair warning to the communities or their customers.

The bill also proposes a financial consumer agency responsible to the finance minister. These bureaucratic positions would be filled with Liberal appointments, like Mr. Lou Sekora, just as many other failed Liberal candidates have been given patronage plum jobs by the Liberals. We would support an independent ombudsman selected by the House with penalty enforcement powers and the ability to make binding directives when necessary.

In conclusion, we hope the Liberals will pay considerable attention and take our amendments seriously. We hope they will listen to the witnesses who will be appearing before the committee. We will support the bill with amendments, particularly in the areas of credit unions establishing co-operatively held banks; the tremendous power given to the Minister of Finance; the bureaucracy created by the new commissioner of the FCAC; and the regulation that demands banks to provide money losing personal accounts.

Financial Consumer Agency Of Canada ActGovernment Orders

February 12th, 2001 / 3:30 p.m.
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Bloc

Pauline Picard Bloc Drummond, QC

Madam Speaker, as this is my first speech in this new parliament, I want to congratulate you on your appointment to the Chair. I also wish you the best of luck.

I would like to take this opportunity to thank all my constituents and assure them that I will always be available and proud to represent them in parliament.

On February 7, the Minister of Finance reintroduced his bill to reform the financial services industry in Canada. Last spring's Bill C-38, which died on the order paper when the fall election was called, therefore became Bill C-8. Today, we are resuming second reading of the bill where we left it off. This new legislation, which will henceforth govern the financial services industry, will probably be passed in June at the latest.

Bill C-8 introduces a number of new provisions, including one on bank ownership. First, under the proposed legislation, a single shareholder will be able to own up to 20% of voting shares in one of the five major Canadian banks. The ceiling is now 10%.

Second, single shareholders will be able to control smaller banks with assets between $1 billion and $5 billion, such as the National Bank and the Laurentian Bank in Quebec.

Third, businesses and individuals will also be able to create their own banking institution.

Fourth, the new bill leaves the door open for major banks to resort to mergers, something they have been doing for a very long time. But the bill provides for public hearings at which the institutions concerned would be required to defend the merits of transactions for the common good.

I am pleased to speak to Bill C-8, an important bill introduced in this new parliament. However, although I am in agreement with the spirit of Bill C-8, I am surprised to see that the changes we have been told about do not appear in the body of the supposedly amended bill. These changes consist of guidelines. This is where we have a problem.

Everyone is aware of the Bloc Quebecois' interest in amending the legislation governing financial institutions. We contributed to the debate by submitting a brief, because we believe in the need for a legislative environment which helps to increase the capacity of our financial institutions to deal with global competition.

Foreign incursions into Canadian financial services markets are already an undeniable reality. In recent years, a number of foreign banks have established a presence in certain areas, such as electronic banking, credit cards, bank investment services and discount trading. In this era of globalization, they are competing with Canadian banks on their own turf.

As I have said, the Bloc Quebecois wholly subscribes to the spirit of the new legislation and to a number of its provisions. That said, certain problems we found during the last legislature are still present in the new bill. Even if we note a considerable change as far as the demands of the Bloc Quebecois and Mr. Landry are concerned, the four points are not incorporated into the bill but into the guidelines on the reclassification of former schedule 1 banks with assets of under $5 billion.

I would like to tell the hon. members what the applicable criteria are. These are: the safety and solidarity of the bank, direct or indirect employment, location of the bank's decision-making and administrative centre, consumer requirements, the bank's business and activities, and the bank's future prospects in a global context. These are the elements set out in the guidelines, but not in the bill itself, which concerns us somewhat.

Examination of the bill in its entirety also shows the frequency of loopholes such as “the minister may, if he sees fit” or “provisions of the act cease to apply if the minister should so decide”.

There is too much room for discretionary powers for a single man, namely the Minister of Finance. Wherever there are provisions on banks, insurance companies, trust companies, and the financial sector as a whole, the minister reserves the right to alone decide, from criteria known to him alone, whether an operation is unacceptable or not. He defines certain concepts, such as low-cost deposit accounts. It is unacceptable that this discretionary power has such sway, more even than the law itself.

In general terms, we would have preferred greater clarity in the decision making process and greater detail on certain concepts, such as low-cost deposits for the disadvantaged.

As regards consumer protection, the Minister of Finance remains vague and expresses more wish than real policy. The bill contains a number of provisions intended to protect and empower consumers of financial services. However, most of the groups heard in committee feel that these provisions are vague and will complicate the agency protection mechanisms.

Among others, there are provisions that intersect or overlap provisions of Quebec's consumer protection legislation. We oppose this. Consumer protection is exclusively a provincial matter.

However, protection specific to the banks can be a federal matter. But when we talk about consumer protection or the protection of personal information, this is a provincial matter, exclusively.

This bill talks of new intrusion by the federal government in areas of Quebec's jurisdiction. The Government of Quebec is, however, well covered by an array of laws. They include the consumer protection act, the personal information protection act, the insurance act, the trust companies act, the Quebec savings companies act and the credit and securities act.

All of these acts contain elements of consumer protection. How then will consumers know which legislation applies? Will the Quebec consumer protection act apply in a specific case? Quebecers might wonder when they look at the federal legislation and the laws we have in Quebec. How is one expected to know which act shall prevail? Will it be the Quebec consumer protection act or the new federal legislation? It is really not clear. Let us not forget that legislation respecting consumer protection is provincial legislation.

Consumer protection also concerns another group, namely the poor. The bill provides a definition of “low-fee retail deposit account”. Can anyone tell me what is meant by a “low-fee retail deposit account”?

According to the Minister of Finance, these so-called low-fee retail deposit accounts will ensure accessibility to financial services for low income people. Even though I got a Bachelor of Arts degree, I still cannot figure this one out.

No one knows who will be entitled to such an account, except the minister. No one knows if that account will be accessible everywhere, except the minister. Why? Because all these issues will be covered by regulations. One must really have confidence, or else ignore what is going on. We cannot understand, because the bill does not provide explanations.

The government is saying “Trust us. This will be covered in the regulations”.

This is all we have to go on for now, but it is not an assurance that consumers will be better protected under the new legislation.

When a branch closes and there is a reduction in services available to consumers, all the bill requires the bank to do is give six months' notice. Whether the bank is being closed in one, two, three or four months, it is still being closed. What good is this provision?

How can the minister say that such a weak provision ensures increased accessibility to financial services? The Minister of Finance is the only one who thinks so.

Let us imagine the case where a bank in a given region decides to close its doors because it is not doing enough business. We say that there is nothing in the bill guaranteeing the community that the bank must provide services. The bill says that the bank must give six months' notice before closing.

Is this good enough for the community served by this bank, when it was the community's savings that improved the bank's bottom line? One day, if business is down, the owners say: “We will restructure it, move it to a larger centre. You folks can find somewhere else to bank. We gave you the required notice and now we are closing”. This is unacceptable and it is not looking out for consumers.

When it comes to the real social and community role of banks, we would have liked the Minister of Finance to have paid attention to the proposals submitted by the Bloc Quebecois member for Hochelaga—Maisonneuve concerning reinvestment by banks in the community. I know that my colleague will be speaking to Bill C-8. We will have an opportunity to hear him.

In addition to the problems for consumers, there is a major problem in this bill with respect to ownership of major banks and financial institutions in Canada.

At this point, I should mention the bill's flexibility in allowing financial institutions to pursue their activities, and to deal with competition and globalization.

However there is a difference between the flexibility found in some aspects of the bill and the fact that some of our financial and banking institutions could be literally turned over to one investor who could gain total or near total control over these institutions or their management.

What we do not understand, and there lies the rub, is that in the case of the largest bank in Canada, the Royal Bank, one individual could own 20% of the shares? It used to be 10%. Now the percentage has climbed to 20%.

The reason given by the minister for not allowing more than 20% is that, in his view, it could be dangerous if one shareholder owned more than 20% because he could take control. One individual could take control of a major bank, a foreign investor could take control of the Royal Bank.

But in the case of the largest bank in Quebec, the National Bank, which is a medium size bank, one individual could own 65% of voting shares.

Why such a difference? Why such discrimination?

Why should it be more dangerous in this case? The minister says it cannot be raised to 30%, 40% or 50% for the largest bank, the Royal Bank, because it could be dangerous.

But in Quebec, the National Bank, which holds the business assets of Quebecers, could be bought by one individual who could own up to 65% of shares. In this case, it is no longer dangerous?

Why allow one individual so much control over the savings of Quebecers? This does not make any sense.

In some of the clauses I have read, they say it is not serious, that the National Bank has got to about $4 billion and will be governed by the rules for the major banks, where a shareholder could not hold more than 20% of voting shares.

Before this could happen, the Minister of Finance reserves the right to examine the entire situation and it could take up to three years before the bank could be allowed to come under the 20% rule.

During those three years, what is there to stop a foreigner from coming here and making use of the 65% rule to acquire all the power and then transferring the head office and all specialized jobs? The bank would be subject to foreign interests or a foreign business.

Why is this dangerous in one instance and not dangerous for the National Bank? We still wonder, why take the risk? Why two different measures, one for the big banks and one for the medium size ones? In this case, the risks are the same.

We have other criteria to add to this bill, and will do so via amendments.

Reference has been made to the guidelines. These are not part of the bill, but rather an aside, and the Minister of Finance reserves the right to apply them or not, as he sees fit. It is not reassuring to us that they are not an integral part of the bill.

The Minister of Finance of Quebec had sent a letter to the Minister of Finance of Canada calling for him to take these provisions into account, in order to reassure the consumers of Quebec and the people with savings. In his letter he wrote:

To ensure that a merger of the major banks is in the public interest, there is provision that such a merger will subject to a process of examination and that approval for the amalgamation will be subject to certain predetermined criteria. If this approach is necessary in the case of a bank merger, a similar approach is all the more justifiable when an individual is allowed to hold more than 20% of the voting shares of a low or moderately capitalized banks.

Public interest should be defined, in the present instance, according to the following criteria:

—The effect of the change on the activities of the banks, including available services.

—The effect of the change on employment at head office and in the branches and including professional jobs or those requiring particular expertise.

—The effect of the change on the regional economy and on the region's technological development.

These are the criteria we want to see and this is why we will be making amendments. I hope the government will support them.

Financial Consumer Agency Of Canada ActGovernment Orders

February 12th, 2001 / 3:15 p.m.
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Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Mr. Speaker, I am delighted to continue my speech, which I began before question period today.

I also thank you, Mr. Speaker, for giving us the privilege of debating the issue of agriculture. I commend the member from the Progressive Conservative Party for once again raising that issue. It is an issue which is very important to all of us who are representing ridings that have a fair number of farmers in them. We look forward to that debate tomorrow evening.

To continue with our debate on Bill C-8, the act to establish the financial consumer agency of Canada, before we were interrupted I was talking about some of the issues that are dealt with in the bill. As I indicated, we are mostly interested in supporting the bill. It is a bill that is long overdue. If anything, we should probably chastise the Liberal government for not acting more quickly.

One of the things in the bill that I consider to be very important is that it does provide for more competition. I have observed over the years that not only myself personally but many of my friends and, since I became a member of parliament, a number of my constituents, appreciate having a choice.

We have had quite a bit of discussion about airlines lately, about the fact that with less competition we seem to be getting lower service levels from Air Canada. It would be wonderful if we had a very strong, viable competitor, because that would mean we would then get better service as consumers.

The same thing is true in the banking industry. It has happened to me more than once in my life that I have been displeased with the way I was mistreated by the banks on certain particular issues. I had, in every instance, the option of saying to that bank “I am out of here, you are done” and saying that I was not accepting its low level of service and the way it treated me. I did that. I will not mention the specific banks. I have dealt with several. I have always appreciated the opportunity to go to a competitor.

It just so happens that I have now been a member of the credit union in my community for a large number of years. I should not use this venue to advertise for the credit unions, but I am glad that this legislation will provide a greater ability for credit unions to offer good competition to the banks. I have found the credit unions very responsive to the needs of their members. That is because instead of being owned by big investors somewhere, they are actually owned by the people who bank there. We have membership meetings. We have shareholders' meetings, and we can go to them, listen to the reports and put forward motions. We can make suggestions to the board of directors, which usually tries to respond to them. Sometimes, of course, they cannot because of various restrictions being put on them.

I like the fact that in Bill C-8 there is more opportunity for competition. The rules for starting up new banks have been made more favourable. The requirement that a group now needs to have only $5 billion capital in order to start up, as opposed to the previous $10 billion, is a good forward move. There is a reduction in the requirement to have 75% of the board of directors be Canadian. That is reduced to 66%. That is a good move because it permits people from other countries to participate as well in establishing competitive banks in this country. I believe that can only help our own domestic banks to provide better service.

There is also, of course, a better and a more transparent process for merging existing banks. We support in general the legislation that is being proposed on that account.

There is also an improvement to consumer protection in the bill. One of the things we struggle with as members of parliament is what happens when a constituent comes to our office with a complaint against a specific bank. There are some cases that are very difficult to deal with. There are some that are impossible as they are legal matters and we cannot deal with them. Sometimes we find that just being able to show support for the person to the bank or the banking ombudsman helps to get these problems solved.

The new legislation in Bill C-8 requires that all banks and financial institutions have in place complaint procedures. In other words, they cannot just do this on an ad hoc basis. They must actually come up with a formal procedure for dealing with complaints, which must be reported to the Office of the Superintendent of Financial Institutions and is subject to review.

There is a very good consumer protection change in the bill which has to do with the Canada deposit insurance. Until this bill is passed, banks are required to hold insurable deposits. That is now being changed so that the banks themselves will be insured institutions, so I believe that in general there is greater protection for consumers and for depositors.

There is also better access to the access to payments system. This is a great improvement. There are a lot of financial institutions that are not banks but transfer great amounts of money to Canadian citizens, for example, investment firms, life insurance firms and so on. With their ability to access the payments system there is better service for consumers at a lower cost, because it basically cuts out one of the middlemen in the transaction. Giving access to the insurance companies, trust companies and others means that they can actually set it up so that they can transfer money directly into recipients' accounts, on an annuity, for example, without having to go through the bank, thereby saving money. It should be a more reliable and efficient service. We support that move.

Insurance companies are a vital part of our financial base in the country. They are important. They are one of the pillars of the financial structure. I am sure that essentially everyone in the House and, I would hope, everyone listening on TV or hearing this later on, will take the time to make sure that they have insurance in place. It is a very important thing to protect families and others. Here again, Bill C-8 provides for a more equitable system for establishing new insurance companies. There are lower capital requirements, which hopefully will increase the amount of competition and thereby improve service for Canadians.

Finally, there are some other protections for consumers in the Office of the Superintendent of Financial Institutions.

All in all, this bill is worthy of our support. We should probably make sure that it gets to the finance committee as quickly as possible. Hopefully, interested people who have identified some amendments they would like to see included in this 900 page document will appear before the committee and show us, chapter and verse, what needs to be amended. We as a committee will then consider that and hopefully the outcome will be a new structuring of financial institutions in Canada, which will make them strong in the long run, give us great financial stability in the country and make us a major competitor in world markets.

Financial Consumer Agency Of Canada ActGovernment Orders

February 12th, 2001 / 1:45 p.m.
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Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Mr. Speaker, I am delighted to be able to enter into the debate on Bill C-8, which will establish a new organization of government, the financial consumer agency of Canada. It also involves the amendments of a number of acts.

I am aware that we cannot use props so I cannot show the people of Canada the size of the bill without actually reading from it. I will just open it at random here and read one of its sections:

That subsection (6) does not apply in respect of a particular transaction if the bank is acquiring control of an entity whose business includes an activity referred to in paragraph 2(b), other than a specialized financing entity.

That is only one of three parts of section 390(7) on page 480 of the massive bill. We obviously see that the task of the opposition in bringing a critique to the bill is mammoth indeed. For us to go through and decipher the meaning of even one paragraph almost stretches the brain to capacity.

I will not be able to go through it entirely. Nor is that the purpose. However I want to go on record by saying that I agree with the bill in principle. We should send it to the finance committee forthwith, so that we can do some detailed study, along with our researchers, and listen to the witnesses that come before it.

I had the privilege of being on the finance committee in the previous parliament. We spent quite a bit of time on what was then Bill C-38, which was essentially the same bill. We heard from many different interest groups. Some were very much in favour of the particular legislation going forward. Others came to us with very specific concerns.

In fast summary I could mention three of the groups had great concerns. Those who ran automobile dealerships and automobile leasing companies were very concerned that we should not, in amending the way banks operate, give them the ability to become involved directly in automobile leasing. I have not read every word in the 900 page document, but as far as I know that prohibition is still maintained and we will not have the problem of having banks in automobile leasing.

The second group was the insurance people. They do not want banks to sell over the counter insurance because it would be deemed very unfair in the competitive field. I am not saying I agree with it but that was their argument. They made us a very strong presentation. I believe it is upheld in the legislation as well.

The third group that was very significant in its impact statements to the committee represented the down and outers in society, the people who do not have large financial holdings and in many cases no holdings at all.

They require basic banking services. They were concerned with monopolization and the concentration of the finance industry in fewer and fewer holding companies that they would be even more disadvantaged. They gave presentations to the committee. I believe the bill addresses their concerns to some degree. I have some philosophical questions about the way it does, but it is an interesting concept.

I will talk very briefly about different parts of the bill, the financial consumer agency of Canada act. It is appropriate to commend the Secretary of State for International Financial Institutions for the openness that is apparent on that side of the House in listening to the debates and incorporating into the legislation the various concerns we as a party and Canadians are bringing to the debate.

I also commend the member for Prince George—Bulkley Valley, one of our members in the Canadian Alliance, who has worked very hard in bringing forward ideas, concepts and principles that should be incorporated in the way our financial institutions are run. He has done commendable work. It is interesting that many of the things that he first came up with in his report are incorporated in the legislation.

To all the people out there listening in radio land I say that the work of a good, effective opposition is useful in parliament. We think we could do better if we were on the government side, but we on the opposition side are influencing the government. We should debate each other in a respectful manner, not the way we were forced to debate in the last election campaign. We should debate issues forthrightly and talk about the different options. Then debate is useful. An effective opposition is very important.

I also emphasize that we need a very strong financial sector. Sometimes the in thing to do is to bash banks. Many of us receive complaints from our ridings about the way people are treated in banks. We have to respond to them. Usually we try to get them in contact with the right people so their problems can be solved. Many of the complaints we hear about banks are specific.

Having strong banking and financial sectors is absolutely critical. We ought not to get into a malaise of complaining about them all the time, although it is appropriate through legislation and other presentations for us to put forward the wishes of our constituents and the fact that they deserve good service from banks.

Consequently I appeal to the banks to make sure they run their businesses properly. They should do this so that legislators do not have to come up with too many 900 page documents to regulate and control how they do their business. My first choice would be for them to make their decisions in an honourable fashion so that the public does not have reason for complaints or to come to us as legislators with a cry to bring in regulations and laws to control and restrict the behaviour of banks.

In a very real way banks have to exercise a serious social conscience. They have to make sure that they are treating their customers fairly. They have to make sure that all depositors and all people who have invested in banks are giving their money in trust to organizations that are credible and solid. The last thing we want is a financial organization that is tenuous and cannot be depended upon. It is very important for the banks to do this work. It is also very important for the government to bring in regulations and a framework for financial institutions which permit that to happen.

I will comment on some specifics with respect to the Bank Act. There is a change in the way banks are governed. One important point is that the ownership of banks is now more flexible.

Financial Consumer Agency Of Canada ActGovernment Orders

February 12th, 2001 / 1:30 p.m.
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Liberal

Shawn Murphy Liberal Hillsborough, PE

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.

Financial Consumer Agency Of Canada ActGovernment Orders

February 12th, 2001 / 1:10 p.m.
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Progressive Conservative

Scott Brison Progressive Conservative Kings—Hants, NS

Mr. Speaker, it is with pleasure today that I rise to speak on Bill C-8. Since it is my first time rising in the House for an actual speech since the resumption of parliament, I would like to take this opportunity to thank the people of Kings—Hants for the honour and privilege of representing them again. I also thank them for their unswerving support in the fall byelection when my leader was elected as their representative during a very critical time in the history of our party. I do not think they wanted me back. I think they wanted to keep my leader just a little bit longer but the unnecessary fall election precipitated changes for which we were not in control.

The global financial services sector has undergone more changes in the last 10 years than in the previous 150 years. No major regulatory reform has occurred in the financial services sector for the last 10 years.

In 1993 Canada was ahead of the U.S. in terms of regulatory reform affecting the financial services sector. Today we are far behind the U.S. in this critical area of our economies, particularly with the last vestiges of the Glass-Steagall act being gone now from the U.S.

The government has dilly-dallied, dithered and delayed at every opportunity. It has really been dragged to this point, kicking and screaming, to actually address some of the issues of the financial services sector.

In 1998, when the MacKay task force came out with a comprehensive set of recommendations, which balanced consumer interests as well as competitiveness issues for Canada's financial services sector, it represented what should have been considered a recipe, not a buffet.

Instead of taking that report, working with it, treating it respectfully for its tremendous contribution to the debate of this important public policy area and implementing many of the recommendations, the government chose to cherry-pick some of the more politically palatable recommendations of the MacKay report.

In fact, the government made public policy based in many cases on perception as opposed to dealing with the realities. Public policy and changes in public policy should always be based on reality and not on perception.

Before I go further, it is important that I declare I have involvements in the financial services sector. I have an involvement with an investment bank, not one of the chartered banks but with an investment bank. As such, while there is no direct linkage or effect of the legislation on independent investment banks, it is important that I do declare that as an interest.

Currently Canadian chartered banks are delivering on the whole, if one looks at it from a realistic perspective, reasonably good value to Canadians. We have a stable and an efficient system with among the lowest service charges in the industrialized world. We have 500,000 Canadians working for banks with a payroll of $22 billion, and exports of $50 billion per year of services. Ultimately, at the end of the day, over seven million Canadians actually own bank shares directly or indirectly.

It is important that we balance consumer interests, which are essential and need to be adhered to, and the interests of bank shareholders because in most cases they are the same people. Many of the investment vehicles that Canadians are relying on for their future post-retirement financial well-being, such as pension funds or mutual funds, have been invested in banks.

It is very difficult to invest in a mutual fund in Canada without investing in a bank. The percentage of the TSE that is consumed by banks in terms of investment capital is significant. We are fooling ourselves if we try to divide consumer interests from shareholder interests consistently because the two can be balanced, and the MacKay report demonstrated that.

It is also easy to bash banks, with the possible exception of politicians. Bankers are probably the least popular group in Canada. We should remind ourselves that it is not a legitimate reason to attack banks. We should actually base our attacks on some specific issues as opposed to simply doing it because by bashing banks we can make ourselves as politicians marginally more popular.

There are several positive features in the legislation. A negative feature, however, will be that it will lead to a dramatic increase in the level and layers of bureaucracy. The legislation will give the finance minister unnecessarily great and sweeping powers to intervene. It will require banks to publish information that arguably is of no practical purpose except to appease some of the advocacy groups.

On the positive side, the ownership and capitalization rules will be less restrictive. It will be easier to start a small bank. That is very good for the level of choice that Canadians will have ultimately in their banking services. Banks will have wider investment powers.

I am looking forward to changes in the co-operatives act, which will enable credit unions to compete more directly with banks and improve the competitiveness factors and services available to Canadians particularly in rural communities.

Foreign banks will have more flexibility in Canada. While that is a positive feature from a consumer's perspective, and we are supportive of foreign banks having greater access, we should recognize that foreign banks are gobbling up market share in Canada. Whether it is an MBNA or an ING, whether it is in the credit card business, small business lending or Internet banking, foreign banks can come in here without the impedimenta of bricks and mortar or legacy costs of bricks and mortar and compete directly with our Canadian owned banks on very specific areas of niche businesses.

By cherrypicking those businesses it expose the napes of our Canadian banks to a lot of competition. These foreign banks are not necessarily playing by the same rules in terms of commitments to communities, reinvestment and that sort of thing.

While we are supportive of greater levels of foreign competition from the perspective of individual consumers, we have to be careful that we do not handcuff our Canadian banks, expose them to this competition, and at the same time jeopardize the returns of many Canadians who are investing in these banks.

There will be greater access to the payment systems for life insurers, securities dealers and money market mutual funds. That will lead to greater levels of products and services and a greater variety of products and services for Canadians.

There will be a more transparent merger review process. It is still lengthy and demanding, but at least a basic set of ground rules is established by the legislation. At the end of the day the finance minister will still have the final say. I believe that the competition bureau should at the end of the day be able to rule on this matter.

We should not be sucked back into the vortex of the highly politicized merger debate that erupted in the House a couple of years ago when the Liberal caucus witch hunt on banks occurred. They referred to it as the Liberal caucus task force on the financial service sector, but it turned out to be a witch hunt.

The ministerial discretion provided by the legislation in any number of areas is significant, with sweeping powers to approve or reject mergers and order effective changes to the payment system.

I have heard my colleagues in the New Democratic Party refer to the minister becoming a banking czar of Canada with the legislation. I do not think that is far off. With the leadership considerations of the Liberal Party of Canada, the dual role of a finance minister who may be a leadership candidate at some point in the future, the potential for politicization of this very important public policy debate is high.

The last time the minister had an opportunity to negotiate with banks to get conditions from banks such that the interests and concerns of Canadians were met adequately before mergers were to proceed, he simply slammed the door. I believe on December 14, 1998, he just slammed the door on bank mergers for short term political interests instead of negotiating..

At that time the Bank of Montreal and the Royal Bank had committed, if the mergers were allowed to proceed, to a doubling of lending to small business from $25 billion to $50 billion. They also committed to the establishment of a new bank for small business lending, a reduction in service charges and an increased number of staffed outlets. These are some of the types of things that actually could have benefited Canadians if legitimate discussions and negotiations were to have occurred, but they did not because of politics.

The five month approval process for a proposed merger is a long time in the hyper-competitive global financial services sector. We recognize the importance of the process but we also have to recognize the speed with which changes occur and conditions change in this environment.

The cross pillar merger restriction is a matter of government policy but it could, in many ways, be wrongheaded if we look at what is happening elsewhere. In fact it is intuitive to expect that a cross pillar merger would lead to greater levels of security not less, and that it would be beneficial.

As a result of the legislation, the government will have power to intrude to a greater extent in the financial services sector than in any other Canadian industry. Banks and other large financial services firms with equity in excess of $1 billion would need to do public accountability statements on an annual basis describing their contributions to the Canadian economy and to society, such as small business lending practices, charitable donations, community involvement and the location of any branches opened or closed.

I have banks in small and rural communities in my riding. It is very important that we work with the banks to ensure the continuation of services in these communities. We have to be cognizant that banks are not the only necessary service being provided to Canadians by the free market. Certainly financial services are necessary to all Canadians but so is food and shelter.

The logical corollary of the government's arguments, as presented in the legislation, would be that ultimately we would need to force companies like Sobey's and Loblaws to provide free food to Canadians regardless of income. In fact people building apartment buildings would have to build some extra apartments because there will be a need to provide free apartments by the private developers to individuals regardless of income.

We should start first with Canada Post. Certainly Canada Post, as a crown agency, should be giving out free stamps to people regardless of income if the government is to follow its own logic.

We need to ensure that a bank closure in a rural community goes through the same process as a grocery store closure. Surely, food is as important as banking services.

What I am trying to point out is that there are near toxic levels of hypocrisy in the legislation in the way it treats one sector and does not deal with the realities of what we enjoy in Canada as a free market. There are now more banking outlets in Canada as a result of technology than there have ever been. Any one of us can withdraw money at a grocery store with a bank card. We can use also use bank cards to buy groceries.

Technology has made a huge impact on improving banking services for Canadians at the grassroots level. I believe that in areas where the Bank of Nova Scotia has no branch outlet it has been working proactively with the post office in order to provide some level of service. There is nothing at the end of the day, particularly for senior citizens, that beats actually dealing with a human being as opposed to an automated teller.

The credit unions' ability to take over banking services in some of these communities is the type of transition that needs to be encouraged. Sometimes the government's approach to some of these issues is very wrongheaded and is based on the anachronistic notion that somehow governments should regulate and overregulate until eventually the private sector will do everything the government tells it to do. The effect of that over the long term, if we apply it to every sector in the economy, would actually be very negative for all of us.

We will be supporting the legislation because by and large the positive changes are long overdue and simply cannot be delayed further. This piece of legislation was another victim of the early election call.

We are supporting the legislation despite some of the less positive elements of it. Another area of the legislation that on the surface sounds very good but has some real problems is the new consumer agency.

First, there is no reason why the agency could not report directly to parliament as opposed to the minister. The agency would be paid for by the financial institutions. Ultimately this agency, as well as the increased regulatory burden on our agencies, will lead to increased costs for the banks. There is no way around that. The costs will ultimately be passed on to consumers or will result in a lower return for about seven and a half million silent Canadian investors who are depending on the returns for their retirement incomes.

The new agency and the regulations could have a less than desirable impact. As a result of the law of unintended consequences, many of the positive impacts that people foresee from this agency and this greater level of regulation may not come to pass. Canadians might see higher costs for banking services as the costs are passed on to them in the end.

I am concerned that we may be further exposing our already disadvantaged Canadian banks in terms of the global environment. We seem to be handcuffing Canadian banks while exposing them to foreign competition.

Under the legislation bank holding companies in Canada would need ministerial approval for most categories of permitted investments. In the U.S., financial holding companies need only notify the federal reserve board 30 days after making a non-bank acquisition. These are some of the disadvantages that could lead to significant problems down the road for the Canadian financial services sector.

I hope that in 10 years we do not look back at this legislation and other policy movements by the government and see that they were in fact the beginning of or the planting of the seeds of a foreign owned Canadian financial services sector.

We all like to complain about the banks. I have done it a lot myself. However, if there is a worse thing for a guy like me from Cheverie, Hants county, Nova Scotia than dealing with one of the big banks based in Toronto, it would be dealing with one of the big banks based in Zurich, New York or Chicago, a bank with no vested interest in the future of this country. The need for strong, Canadian-owned financial entities becomes particularly important in the context of national unity.

I hope we do not look back at this legislation and other decisions that are being made in this place at this time as having been the beginning of the end of a strong, Canadian owned financial services sector.

Some of the Luddite elements of the legislation are at best egregious and wrongheaded. Less generously, I think they are dangerous for the future of the Canadian owned financial services sector and these jobs that Canadians depend on as we enter an exciting 21st century.

The opportunities available to Canadians in the global environment are almost limitless, but we have to ensure that the Parliament of Canada and Government of Canada do not limit those opportunities by trying appease to the politics of the short term.

Financial Consumer Agency Of Canada ActGovernment Orders

February 12th, 2001 / 12:55 p.m.
See context

NDP

Judy Wasylycia-Leis NDP Winnipeg North Centre, MB

Mr. Speaker, I am pleased to follow my colleague from Nova Scotia in putting on record concerns and comments from the New Democratic Party with respect to Bill C-8. It is interesting to note that the debate has just turned to the whole issue of sensitivity of banks to the communities they are supposed to serve and, by implication, the role of government in ensuring that the banks live up to those commitments.

I will begin my discussion by referring to the government's own discussion paper of June 1997 from the task force on the future of the Canadian financial services sector. In that report it is noted that:

Canada, like other modern economies, has traditionally relied on government to provide some assurance that financial institutions are reputable and well-managed, and that they will meet their commitments. In our society, it is accepted that ownership of a regulated financial institution is a privilege, not a right.

It is important that we look at Bill C-8 from that vantage point and from those words by the government and acknowledge that it provides a significant framework for financial services in the country today.

I would assume that there is also an acknowledgement on the part of government in Canada today that access to basic banking services is a right. I hope I am correct in making that statement. I hope that is the basis upon which we are proceeding, because it is fundamental to this discussion and critical to the analysis of this very comprehensive, very detailed, very complex piece of legislation before us. We could spend months analyzing and scrutinizing 900 pages of legislation. It is a very important piece of legislation and I hope it gets a thorough debate in the House before it goes on to committee.

There are many areas of concern with respect to the bill that I could focus my attention on, but I want to do one thing this morning and that is to focus on the question of access. Are we as members of the Parliament of Canada fulfilling our responsibilities to ensure that in legislation, in the laws of the land, people, regardless of where they live and regardless of their economic circumstances, have access to basic banking services?

I would suggest that right now that is not being fulfilled today and it will not be fulfilled under the legislation. I would assert that many individuals and many communities are being discriminated against by the actions of the big banks and the inaction of the government. It has been noted before in the House that many communities have been hit hard by bank closures. They have virtually wiped out that right to access personalized banking services.

The hardship facing rural communities, many that have lost all of their banking services, was mentioned this morning. I do not need to mention the many older neighbourhoods, inner city communities of large centres across the country that have been abandoned by the big banks. I would like to give a case study of Winnipeg North Centre.

Winnipeg North Centre, which has a voting population of well over 60,000, is noted for the significant degree of economic hardship and high element of poverty. It is known for its higher than average proportion of senior citizens. It is known for the strength of small businesses that have built the community. While they are prepared to stay, they are suffering daily because institutions like the big banks are abandoning our communities. That community, which I represent, has suffered enormously by the actions of the big banks and the inactions of the government.

In the almost four years that I have served as the member of parliament for that area, we have seen six bank branches close. In a very needy and very committed community, we have been left with a very small number of banks branches that people can access for basic banking services. It is an appalling situation. People, especially low income citizens, senior citizens and small businesses, have been left virtually abandoned without access to banking services.

What has the government said in the face of this? First, delays in the legislation, which offers a tiny initiative, a step forward with respect to bank closures, have caused the problem. The horse is out of the barn. The government's delay with respect to the review of the financial services sector, and now the delays with respect to putting in place meaningful proposals to stop bank closures, has caused the problem. This is the issue we are dealing with today.

What is the point in talking about improved access for low income Canadians when banks in their neighbourhoods keep closing? What is the point of talking about access for people living in poverty who want to get off of welfare and break that cycle of dependency when in fact there are no banks left to access? That is the kind of situation we are talking about.

What is the point of a bill that talks about four months' notice of a closure, when there are no other alternatives? What is the point of legislation that does not first ensure that the banks are living up to their commitments and providing the services that people have need of, expect and are entitled to by right of belonging to a civilized society?

The citizens in my community have been dealt one blow after another. Each time one of the big banks closed a bank branch, they rallied. They came forward and said that a message had to be sent to the big banks and to the government saying that they would not stand for this. They are hurting their very livelihoods and security as members of the community. We continue to run up against a brick wall.

We have tried to appeal to the sensitivities of the big banks, to no avail. We have tried to get through to the Minister of Finance, to no avail. What did he say in response to appeals to him to intervene? He said the government could not really tell a private business what to do and believed that the Bank of Montreal had lived up to the spirit of the bill. That most recent closure in my community was really the linchpin and the final straw in terms of people's feelings of being abandoned. This bank did not even give constituents in my area four months' notice. I realize that the bill has not passed. We have nothing to hold over banks' heads to say that they have broken the law. Is there not enough goodwill on the part of the banks and is there not enough power in the hands of the finance minister to make a difference and make banks to live up to the most basic elements of human decency and dignity? There was no adequate notice nor a single bit of consultation with the community about the impact that it would have on people in that area, not one shred of decent consultation.

The bill states that in some cases if there are questions about profitability, there should be consultation. I know for a fact that all of the branches which are closing in my area are profitable. The profits are just not big enough to satisfy the big banks.

Surely the government has a role to play in providing some access to basic banking services. Surely the legislation has to live up to that basic fundamental question. Are services available to all citizens regardless of where they live and how much income they make? Is access guaranteed as a right by virtue of belonging to a civilized society? The situation is no.

The government and the banks have failed communities like mine just because they are hard pressed, low income, older neighbourhoods and inner city communities; just like they have abandoned rural communities. They have failed those communities. The bill hardly does anything to ensure that the situation is reversed and that fundamental right of access is guaranteed to all citizens. That is one reason why we cannot support Bill C-8.

I hope that in the committee process the government takes these concerns seriously. I hope it is open to amendments to ensure that there is some meaningful process in place to ensure that people have access to banking services, that communities are not abandoned by the big banks, that there is some recognition of the loyalty that customers have had in the banks over the years and that banks are not left to simply play the casino global marketplace without concern for the communities that have made them profitable in the first place.

Financial Consumer Agency Of Canada ActGovernment Orders

February 12th, 2001 / 12:40 p.m.
See context

NDP

Peter Stoffer NDP Sackville—Musquodoboit Valley—Eastern Shore, NS

Mr. Speaker, it gives me great pleasure to rise in the House today to discuss Bill C-8, the financial sector reform act.

The member for Regina—Qu'Appelle, who has been a member of the House since 1968, has been a very active member of the finance committee. A former colleague of the House did yeoman work for the people of Canada and for the House of Commons, Mr. Nelson Riis. Mr. John Solomon did great work in the finance committee by bringing forward financially related matters to the House of Commons for all Canadians. It gives me great pleasure to congratulate them and thank them for their work on behalf of all Canadians and our party.

We could not help but notice that members of the Canadian Alliance were patting themselves on the back, saying what a great job they had done and how the Liberals had incorporated many of their aspects into the legislation. We in the New Democratic Party would also like to congratulate our member from Regina—Qu'Appelle for many of his motions and ideas over the years that are finally incorporated into the bill. Also, I will be splitting my time with the great member for Winnipeg North Centre. I will take the first 10 minutes and she can take the remaining 10.

I will go over some of the positive aspects of the bill. Before doing so, let me indicate that the bill is 900 pages thick. It changes 4,000 statutes of legislation. It is incredibly complex. There is no one in the House or in the country, even with an array of lawyers, who can figure out exactly what it all means in the end.

Anyone who says he or she understands it completely is simply not telling the truth. I certainly do not profess to know all about it nor could I even attempt to, but our member for Regina—Qu'Appelle has studied it thoroughly. He and his staff have gone over it fairly extensively and have come up with their own concerns about and recommendations on the piece of legislation.

One positive aspect of it is that it expands the access to the payment system, which is one of our long held positions. This is a measure that increases competition by allowing insurance companies to offer chequing deposit accounts. Most important, and this is something that I personally really like seeing, it helps credit unions compete by allowing the creation of a single national service entity to support credit union membership. This is a long held New Democratic position.

Also, as members know, there are a lot of people throughout Canada who have complaints about banks. Besides bashing the post office, bashing the banks in one way or another, whether it be for service charges or closure of an institution or facility in a rural town, is one of the great Canadian pastimes. We bash the weather, the post office and banks.

An article appeared in a daily newspaper in Nova Scotia on Saturday about something that Scotiabank has done. It is simply outrageous that Scotiabank, a fine reputable institution like that, would send out to unsuspecting people in the country cheques in the amounts of $500 to $5,000. They sent these out mostly to senior citizens, saying, “here you go, folks, here is a cheque for $500 to $5,000”. A lot of people had no idea what this was all about until they cashed the cheque and spent the money. Then they found out that in essence it was a cash advance on their credit cards. They did not ask for it. No one told them it was coming. It just appeared in their mail one day.

Mr. John MacLeod, the business editor of a daily newspaper, pointed out quite accurately that someone in Scotiabank should have his or her head taken off for this one. It is absolutely scandalous that a bank with this reputation throughout Canada, one of our longest serving institutions, should do that to unsuspecting people. It is simply misleading. It is like the negative billing option with the cable companies. That is exactly what that bank did. As long as banks partake of that kind of practice they will never have the confidence and goodwill of Canadians that they need in order to move forward in the financial sectors.

If we had a Canadian financial services ombudsman and a consumer protection agency, which the bill offers, it would start the consultation process whereby the banks can legally be forced to provide a low cost account. This is a position we have held for a long time. We have to offer those people on low and, in many cases, no incomes the opportunity to use financial services at a low cost that is more beneficial to them.

I must say in jest that for anyone to say this will get people off the social assistance rolls, it simply is not on, as much as we would like to see that happen in a very positive way. I could not quite understand why the secretary said that. That simply is not on.

The bill also formalizes a process of collecting data on small business lending and does not expand the banks' business powers into the areas of auto leasing and insurance networking. This is a long held position of ours, in spite of a recommendation by the MacKay report which said that they should.

Some of the negatives in the bill are very clear. It abandons the wide ownership rule, which means that instead of the 10% ownership rule it would be 20%. That means we could have two people very closely related to one another owning 40% and 60% and so on. That consolidates too many financial services into very few hands.

We believe that down the road the bill and other legislation that will probably come to follow it will eventually lead to full bank mergers and full institutional financial mergers. That would mean that instead of having the broad range of competition within Canada that we see today or that we have seen before, we would see a lot more competition from foreign interests such as Europe, the United States or Asia. That may or may not be a good thing for Canadians, but one thing is clear: a lot of Canadians have no deep understanding, no clear understanding, of what the legislation means to them in their daily lives. Another thing the bill does, which is rather ironic to be talking about, is concentrate far too much power in the hands of the Minister of Finance; we call it the new banking czar.

In the area of parliamentary reform, where we are talking about loosening the powers of the PMO, various ministers and the government side in order to give members of parliament more say, clout and power in representing their constituents, it seems rather ironic that we are talking about a bill that does the complete opposite and gives far too much power to the Minister of Finance. In fact in many ways the devil is in the details. By obscuring the facts, the full impact of the legislation may not be understood by many people. The bill is riddled with regulatory clauses changeable by order in council, which means that the order in council can ignore the wishes of parliament and make changes by decree, thus avoiding the House of Commons and any legitimate debate in the future.

Another failure of the legislation is something the United States has but we have yet to incorporate. I am talking about a community reinvestment act. This would provide the opportunity to force the banks to reinvest a certain percentage of their profits in their local communities. This would be the same as it is in the United States. We believe it would go a long way in assisting the more extremely rural areas.

One thing the legislation does not do is to in any way stop rural bank closures, which is something that a lot of people in rural Canada are greatly affected by. For example, what about the closure of the banks in Sheet Harbour or Musquodoboit Harbour or anywhere in the country where there are small rural communities that need access to financial institutions? The legislation paves the way to make bank closures even quicker, especially of the branches. The argument of course is that foreign companies like ING Bank and others can come into the country and have virtual banking, with no need for the bricks and mortar.

However, a large percentage of Canadians depends on bank branches. They need to see a teller. They need to understand specifically how to fill out the forms for their regular chequing accounts, how to fill out their bank books and everything else. In fact last week one of my constituents passed on and his wife was left with no idea of how to balance a cheque book or do any aspect of banking. Her husband did it all. In how many families in the country does that situation exist today? If the male member of the family passes on and leaves everything to his wife, as in that particular case, can she understand all the intricacies of her financial account and everything else? This happens all the time.

Financial Consumer Agency Of Canada ActGovernment Orders

February 12th, 2001 / noon
See context

Bloc

Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

Mr. Speaker, I am pleased to speak on this important bill, Bill C-8—the former Bill C-38—to reform the financial institutions and create the financial consumer agency of Canada.

From the beginning of the process leading up to this bill, the Bloc Quebecois has been closely associated with the suggestions made through the Standing Committee on Finance.

In September 1998, the Bloc Quebecois also submitted a memorandum expressing its view of the MacKay report, which is behind financial institution reform. We made a number of recommendations in it geared to the modernization of the financial sector and especially of the environment in which the financial sector and the banking sector more specifically were evolving.

We realized the importance of renewing the regulatory and statutory context of financial institutions, which had not been renewed for five years. We were in fact behind the time in some respects, something that was becoming a cause of concern when we could see how quickly the North American and, more specifically, the Canadian financial sector was changing. We were somewhat frightened by the thought of developing in a context that was already several years out of date.

We were the first to ask the federal government to change the rules on the ownership of financial institutions, which prevented businesses from acquiring other businesses in complementary sectors, since the financial institutions act did not permit it.

I would like to quote the brief the Bloc Quebecois tabled in 1998 with the Standing Committee on Finance, in which we asked the government, among other things:

—to change the rules on ownership to permit and encourage the amalgamation of small and medium-sized financial institutions into financial holding companies, as suggested by the MacKay-Ducros Report.

At the time, we supported, and we continue to support, changes on ownership rules to enable groups, such as insurance companies, investment companies or a brokerage firm. The aim was to build strength so that, with markets opening in the financial sector and competition appearing from outside the country and even from within it, the quality of services provided by them could be assessed in a healthy business environment and consumers advised of what they would get for their money.

We warned the government against the rule of 10%. Let me explain that, because I think it is worthwhile to do so. It is a bit complex, but when we take the time—and I have the time to do it this morning—it is easy enough to understand.

Before the minister introduced his bill, a single individual could not hold more than 10% of the banks' shares. This meant that 90% of the voting shares of a bank were allotted among the public. An individual still cannot hold more than 10% of a bank's voting shares and 90% of these shares must be allotted, that is they must be widely apportioned among the public.

With the changes proposed in the bill, we have a totally different situation. The 10% rule becomes the 20% rule. This means that, in the case of major banks—this applies to them—with equity of $5 billion or more, a single individual cannot hold more than 20% of the shares, whether that person is a Canadian or a foreigner, while 80% of the shares of these major banks, again those with equity of over $5 billion, are allotted to the public.

The bill proposes two other categories regarding ownership. The second category includes banks with equity of $1 billion to $5 billion. For these banks, the degree of ownership is different from that of major banks. In the case of these middle size banks, a single individual can own up to 65% of the shares. The other 35% must be widely distributed among the public.

This is a major change. We still wonder why, considering that the 50% plus one rule is the generally accepted one for full control of a business, 65% of the voting shares of a bank such as the Laurentian Bank, for example, which has equity of less than $5 billion, could be owned by a single individual. The other 35% would be allotted among the public in a democratic fashion.

This is a revolution, a financial one, of course. I call it a revolution because, up to now, the philosophy that has driven all successive governments since passage of the Bank Act many decades ago was to give the financial institutions' shares a wide distribution, to prevent an individual from holding too much control over the banking institutions or the financial institutions in general; as everyone knows these institutions have a strategic importance in the economy.

The practice of widely distributing the voting shares of a financial institution to prevent one individual from holding extraordinary power over the Canadian financial sector or even industrial sectors stems from a policy that was renewed from decade to decade.

We have to realize that the financial sector is a public interest sector in the sense that multimedia companies, companies in conventional industries or anywhere else have to be able to rely on a solid, open and transparent financial sector, one that will not be detrimental but rather useful to them.

Having a single individual controlling a financial institution, that could be a lending institution for SMBs, could give rise to touchy situations as far as conflicts of interest are concerned.

Here is an example. The main shareholder of a medium sized bank owns more than 50% of the voting shares of the bank, which makes loans to small businesses. But the main investor or shareholder of the bank is also involved in the same industry as a small business that is asking for a loan from the bank.

The shareholder who owns more than 50% of the voting shares and therefore has full control of the bank making loans to small businesses will have the final say on the loan request of the business in the industry where the main shareholder is also involved. The main shareholder of a bank can also be an industrialist in a given industry.

In the past, we have avoided this kind of situation where an industrialist involved, say, in the steel industry, who has full control of a lending institution can sideline his competitors because such control allows him to have the last say on loan requests from competitors. This has been avoided in the past through widely held ownership of financial institutions and especially banks.

We now have a dangerous situation where, in banks with a capital between $1 billion and $5 billion, a single person can own up to 65% of voting shares. That individual has full control.

We do not like this. In Quebec, we have one institution in the category of medium sized banks in Canada, and that is the National Bank, the bank used by SMBs in Quebec.

We think it is very dangerous for an institution such as the National Bank to end up with rule changes whereby one person could hold 65% of shares, while the remaining 35% would be held by a wide range of members of the public.

Some said that there were no longer any problem, that it had been addressed with Bill C-8, formerly C-38, and that in any event the National Bank now had equity capital topping $4 billion, which could soon reach, and even exceed, the $5 billion ceiling, putting it into the category of a major Canadian bank.

In that event, the same ownership rules applying to those banks would also apply to the National Bank. No one individual could hold more than 20% of shares, and 80% of other voting shares would then be widely held, thus eliminating the problem.

There are two ways of looking at this: the first is that the National Bank does not yet have $5 billion in equity capital, and it could be months before this ceiling is reached. Also, it is clear from Bill C-8 that—even if a bank reached a certain level of equity capital, even if the National Bank had over $5 billion in equity capital—the Minister of Finance has full discretion to determine the number of years or months needed before this bank can reposition itself in a new category with respect to percentage of shares.

A three year period is specified. In other words, 10 months or a year from now, the National Bank could reach a level of equity capital exceeding $5 billion, which would put it into the category of a major bank subject to the ownership rule of 20% of the voting shares being held by a single shareholder, whereas the other 80% are widely held. It could be considered as such, but it is up to the Minister of Finance.

Several clauses of the bill refer to the finance minister's discretion. The Minister of Finance is given so much decision-making power that, with this bill, the government is all but crowning him legislative emperor of the financial institutions sector.

Towards the end of the bill, entire paragraphs contain a provision saying that the minister may do this and that. Finally, this is a bill that could be called discretionary from the minister's point of view. It is all about discretion.

Therefore, even if the National Bank reached a level of equity capital above $5 billion, the finance minister could decide to consider it as belonging to the category of 20:80 percentage ratio of voting shares only in three years.

Moreover, subclause 393(2) gives the finance minister the power to specify a later day as the day from and after which the financial institution must comply with the new provisions of the law. So, this creates a situation where, even if the National Bank reached a level of equity capital exceeding $5 billion within the next year, the minister could decide that the new category or ownership rule will apply only in three, four or five years.

This period of three, four or five years is an eternity in the financial sector. Anything can happen during that time. The National Bank might not be protected from a takeover by a single individual or by speculators for resale, thus enriching only one, two or three individuals instead of everyone.

Can we take that chance? As I said, three, four or five years is an eternity in the financial sector. Anything can happen during that time, especially when one realizes the speed with which changes take place. Ought we not to set some criteria for this ownership issue in order to avoid having the negative effects of the new provisions blow up in our faces in the coming years in connection with the National Bank or some other financial institution?

Just to provide hon. members with a slight idea of the speed with which changes can take place, I will quote from the MacKay-Ducros report, which is what led to the bill being drafted by the Minister of Finance and his secretary of state.

The latter indicated that two virtual banks had cropped up within two years, as the MacKay-Ducros commission sat. In less than two years, these two virtual banks started up: the Citizen's Bank of Canada, a subsidiary of the Vancouver City Savings Credit Union, and ING, the subsidiary of a major Dutch financial conglomerate.

BNA and the Capital One Corporation, both of these American credit card specialists, have begun Canadian operations, again during the less than one and one-half years the MacKay-Ducros commission was sitting.

A number of special financing corporations began to operate in Canada, among them Finova and Heller Financial. Nine new pooled investment fund companies also started up within that same period of under two years. From September 1996 to May 1998, the number of pooled investment funds available in Canada rose from 954 to 1,079, again in under two years.

Because of the rate these changes occurred during the deliberations of the MacKay-Ducros Commission, which in fact caused the commission to make certain adjustments at the end of its deliberations, anything can happen to the National Bank.

We, as Quebecers, need guarantees and additional safeguards, within the bill, to reassure us in this regard and essentially eliminate the negative effects of the new rules of ownership, by taking specific criteria included in the bill into account.

The Quebec finance minister and the deputy premier, Bernard Landry, wrote the federal Minister of Finance last June to express his concern on the way the situation was changing and on the first draft of his bill.

The Quebec finance minister and deputy premier, Mr. Landry, said in a letter to the federal Minister of Finance that with respect to the National Bank public interest in the present matter had to be defined according to four criteria, which he identified and which would complement the bill before us this morning, to the satisfaction of the opposition. These criteria, included in Bill C-8, could eliminate the risks I have just mentioned.

The criteria are as follows:

First, we should evaluate the effect of the change on the banks' current activities, including the services available.

Second, the effect of the change—

In the case of a change in ownership of the National Bank, for example.

—on the head office and the branches, including on professional jobs or jobs requiring certain expertise.

Third, the effect of the change on the economy and technological development of Quebec.

Fourth, the effect of the change on the financial sector and on Montreal's role as a financial centre, including the keeping of the ultimate decision-making centres in Montreal.

Mr. Landry continued, saying:

We think that the legislation should contain provisions ensuring respect for these measures, which would be taken to prevent the unfavourable effects of allowing one person to hold more than 20% of the voting shares in a bank in the previously mentioned areas.

The opposition, the Bloc Quebecois, is not alone in its concern. All of Quebec is worried.

That is why, when the secretary of state told me about the evolution of the bill in this respect, he told me it would be different from the first version. He indicated that, with the publication of the new Bill C-8 on the reform of financial institutions, the Minister of Finance had released new guidelines.

In light of these guidelines, I can tell the House that it would not take much to satisfy us with respect to the ownership rules. In fact, all that it would take is for these guidelines at the very heart of Bill C-8 to be included, so that the minister has a legislative obligation to take into account not only the interests of the Canadian financial sector, the solvency of those who wish to change the ownership of voting shares in a bank such as the National Bank, and the experience of such shareholders, but also the regional effects of such a decision.

It would be easy to take the secretary of state's guidelines and include them in Bill C-8.

The bill already contains a suggestion of them. It would simply be a matter of completing them with the guidelines that accompanied the bill and that were released by the Minister of Finance and his Secretary of State when Bill C-8 on the reform of financial institutions was introduced a few days ago.

Clause 396 defines certain criteria to which I more or less alluded, namely: the best interests of the financial system, the experience of the shareholders and their track record, their character and integrity, their competence and experience and the impact of any integration of the businesses and operations of the applicant with those of the bank on the conduct of those businesses and operations.

We could add, at the end of that clause, criteria such as the impact of the proposed transaction on the safety and soundness>of the bank, on direct and indirect employment at the head office and in the branches, including professional jobs or those requiring special expertise, on the needs of consumers, on the bank's businesses and operations, on the bank's prospects in the context of the global marketplace, on the best interests of Canadians and, where the bank operates principally in one region, such as Quebec, on the best interests of those living in that region.

We could even add to these guidelines the last paragraph found in the document provided by the government, which reads as follows:

A proposed transaction that would lead to a change in de facto control of a former Schedule I bank with equity between $1 billion and $5 billion, and raises major public interest concerns, would be subject to a similar public review process as a merger between large banks.

In the guidelines on the rescheduling of banks previously listed in schedule 1 and whose equity is lower than $5 billion, thus, in the government's reference document, there are some provisions that alleviate our concerns, if we find in the thrust of the bill a reference to the criteria that I have stated, including to the last paragraph, which deals with public interest, and which also calls for public review.

Why is the government not doing this? This morning, during a briefing with high officials, we were told that introducing these criteria and guidelines in the thrust of the bill might constrain the government and prevent the finance minister from having some flexibility.

I do not understand why the finance minister agrees to introduce guidelines and criteria such as those in clause 396 of Bill C-8, and talks about the interest of the Canadian financial system and about more criteria. Regarding the additional criteria contained in a guideline, which he says he wants to apply in case of a change of ownership of the National Bank, why are those criteria already included in the bill less constraining than those in the guidelines he has made public and intends to follow?

That is the question we must ask ourselves. When talking about the interest of the Canadian financial sector is no problem, but it is when it comes to the interest of the regional financial system, that is the Quebec system, I do not see openness, I see a problem. The fact is the Minister does not want those guidelines to be included in the legislation because that would impose upon him the obligation to take all these effects into account. That is what is preoccupying.

If the bill only referred to guidelines on medium cap banks, this would be a step in the right direction and we would consider supporting the bill.

Frankly, I must say there are other problems. However, we intend to propose amendments to this bill. For instance, there is the issue of consumer protection. I will come back to this issue later. We intend to propose amendments that will improve the bill generally. If it were not for the major irritant, the change of ownership rule applying to medium size banks, we would be a bit more willing to work with the government in order to pass this bill rapidly.

Up to this point, there has been a positive evolution. I recall that about eight months ago, the Minister of Finance did not want to hear about guidelines or evaluation criteria regarding ownership changes for medium size banks. Today, after the election, the government is introducing guidelines. This is a step in the right direction, even if it is not enough.

I believe that the government has shown a good disposition until now, showing an increasing openness, which we find satisfactory. It would only need to go a small step further and I believe that we would be ready to fully support its efforts in that direction.

We have other concerns with this bill. As I said earlier, we will be bringing amendments throughout the legislative process leading to passage of Bill C-8.

I mentioned before the widely held voting shares of the financial institutions, including the banks. The concept of widely held shares was used to avoid the problems I raised earlier. But this has caused more problems, since with these widely held shares, any person holding a mere 10% of the shares—the maximum soon to be 20% of the shares—has effective control over the bank and the board of directors.

In the past, we have mentioned and wholeheartedly supported the proposals of the Quebec association for the protection of savers and investors. Its 12 proposals call for a greater democratization of the decision making process and of the board of directors of the banks and financial institutions in general.

These proposals are as follows. It may be time for the finance minister to pay attention. While he portrays himself as the great champion of democracy, he has allowed the boards of directors of the banks to act as if they were feudal lords and to completely ignore the needs of the small shareholders and investors. They do not even need the support of this majority of shareholders to appoint each other to key positions. I appoint you, you will appoint me, and we will keep things in our little inner circle.

The Quebec association for the protection of savers and investors' proposals are as follows, and we support them and will continue to support them strongly.

First, the association asks that the positions of chairman of the board and chief executive officer be two separate positions.

Second, the association asks for a reduction of the barriers regarding election to the board of candidates chosen by the shareholders, instead of candidates being chosen exclusively by the board or by the executives in place and instead of a system where I appoint you, you appoint me and we appoint ourselves.

Third, the association asks that the number of boards where a member can sit at the same time be limited. To avoid conflicts of interest, this might be a good idea.

Fourth, the association asks for the implementation of a process that is more democratic for the election of board members, through votes that are separate and cumulative and without any restriction to the list previously drawn up.

Fifth, the association asks for the elimination of potential conflicts of interest between board members and those who supply goods and services to the institution. Too often we see a board member who is also part of a business that supplies goods and services to the financial institution. It is easy to make such a business flourishing in such an environment.

Sixth, the association asks that it be mandatory for financial statements to be submitted for review and discussion during the shareholders' annual meeting.

Seventh, the association asks that the directors' compensation policy be submitted to the shareholders' approval. It would be interesting if most shareholders could determine what amount a board member receives for the services he provides.

The association asks for the adoption of a code of procedure for shareholders' meetings.

The association calls for businesses to fully record the minutes of all shareholders' meetings and to send those minutes to all shareholders.

The association calls for a reduction of barriers to the right of shareholders to make proposals for and during shareholders' meetings. They do not have that right today.

The association calls for giving securities commissions the right to decide if shareholders' proposals are in order. It is the board of directors that has that right at present; consequently, this right is exercized only by a very small group of people.

The association calls for limiting the powers granted by proxy to executives for shareholders' proposals not yet discussed by the shareholders or for extending these powers with corresponding means to all shareholders having registered a proposal.

Moreover, the association calls for giving access to all shareholders in the name of the real shareholders. Finally, it calls for relaxing the legislation in order to allow for communications between shareholders.

Those are proposals to improve decision making within financial institutions to ensure that decisions are not made by a small number of people on behalf of the majority of shareholders, who are small shareholders.

We would have liked to see these proposals included in the minister's bill since, as we said earlier, banks and boards of directors of banks especially operate in a somewhat archaic, feudal way that is not quite democratic. The association has done excellent work up until now to heighten people's awareness about the fact that they own a few shares, but that they do not have any say. A limited number of individuals all have the power to determine what is good for all the shareholders and what is not.

Throughout the process, we are going to propose amendments relating to matters of this type. In the event we obtain a favourable response from the government, hon. members can be assured that we are not in opposition just to oppose anything the party in power happens to present. If something is good, we will support the government's efforts. In the past seven years we have demonstrated that we are prepared to support good provisions coming from government for the good of the population in general. We are not here to block the progress of government, particularly when the public interest is very much involved, as is the case with reform of the financial institutions. We shall continue to work very seriously in order to improve this bill.

The minister tells us, moreover, that the bill is in place in order to improve the environment in which all Quebec and Canadian businesses evolve, so that they may better face the major challenges that arise, particularly as borders are opening up, as globalization sets in. As a result, major competitors that are highly efficient internationally will be able to compete in our markets, and we and our businesses will be able to compete with them anywhere in the world.

As disciples of globalization, we support this policy and this government approach. However, we are well placed to see that the government gives up when the time comes to take action in very specific areas to support business. It is simply not there for them.

I am going to give a few examples—we will be coming back to this a bit later in the session but I think this is a good time to do it—examples relating, for example, to gasoline and petroleum products. Instead of going in the right direction and increasing the powers provided under the Competition Act to hold major oil companies accountable and allow us to take steps to prove that there is collusion among them to set prices that are detrimental to consumers, the government chose not to do anything. It chose not to strengthen the Competition Act, not to suspend the excise tax for a while, which would have given a reprieve to independent truckers who are being gouged at the pumps. The government also chose not to suspend the GST on heating oil for a while to give a break to those who use that type of heating fuel.

Some businesses that rely heavily on oil for their finished products have seen their costs go up by 15% to 20%. This is a huge increase. It is their profit margin. But the government did not come to their help.

As for employment insurance, we asked that the system be improved and we also asked for lower contributions, particularly in light of the tragic situation of labour intensive businesses.

Just take the restaurant business. During the election campaign, I was made aware of the fact that in the restaurant business 40% of the taxes paid by businesses are payroll taxes. This is enormous. It is more than the income tax paid by these businesses to the federal government.

There again the government should be sensitive to the plight of Quebec businesses. Instead of saying “we have the answer, we reformed the financial sector and thus ensured the profitability of businesses”, the government should do something else.

The same goes for shipyards. Why did the federal government, which claims to care about the development and growth of high potential businesses, not implement the shipbuilding policy that we have been advocating for years?

We will come back with the bill and we hope there will be good provisions from the government, because before the election it seemed prepared to pass the bill introduced by my colleague from Lévis.

Mines are a very promising sector in terms of expansion and job creation. The mining sector is not what it used to be. It has been modernized over the years and is very capital intensive. In Quebec alone it accounts for 17,000 jobs. However, it is suffering considerable problems due to fluctuations in international prices.

The government could have drawn on its willingness to help businesses, increased, for example, financial provisions for mining companies. It could have increased tax deductions for exploration, and to give the country a shipping and rail transportation network that would make the mining sector in Quebec and Canada more competitive.

There is no mention of that. Generally, the government talks of supporting business but when it is time to do something specific, it is not there.

In the case of e-commerce as well, it is said that over the next three years 180,000 jobs could be created in Quebec and Canada. The federal government has not shown any desire to shoulder this sector. One hundred and eighty thousand additional jobs is a lot. There are 95,000 at the moment.

In short, these are examples, and we will be coming back to them. For the time being, the financial sector is under consideration, thanks to Bill C-8. Rest assured that, if the government responds favourably to our amendments, we will support this bill.

In the meantime, it must demonstrate a little greater openness. There is already a little more than there was last year. We hope that by the time the bill is passed it will be a matter of fact.

Financial Consumer Agency Of Canada ActGovernment Orders

February 12th, 2001 / 11:50 a.m.
See context

Canadian Alliance

Gary Lunn Canadian Alliance Saanich—Gulf Islands, BC

Mr. Speaker, I am pleased to stand on behalf of all people of Saanich—Gulf Islands to speak to the bill. We saw it in the last parliament as Bill C-38; it is now Bill C-8. It died on the order paper when the election was called.

We owe a huge thanks to the member for Prince George—Bulkley Valley who just spoke. He wrote a very detailed, in depth report titled “Competion: Choice You Can Bank On” back in November 1998. I had been elected for just over a year at that time and remember receiving a copy of the report. It was very detailed and very long.

He went into every possible detail of financial institutions and banking and how we could improve it for consumers and give them more choices. There was broad consultation with the industry. I was impressed by how much work went into the report and by how much knowledge he had on the subject.

A few years later we in the opposition see exactly what work we have done. Actually the government adopted a lot of it and of course never gave any credit for it.

I applaud the member for Prince George—Bulkley Valley. He has done a phenomenal amount of work in the financial services sector over the last few years. He can be proud when he sees the government actually adopting a number of his measures.

Let us talk about what the bill will do. As we have seen in the last few years, a number of major banks wanted to merge. They put forward proposals to do so which were all quashed by the government.

I am pleased to see that the government has finally come out with a formal merger process so that at least financial institutions know where they stand. They literally invested millions and millions of dollars to go through the process, only to be stopped in the end. Some would argue it may have been for political reasons, that the Minister of Finance was annoyed because he did not get advance notice. That is not the right reason to stop mergers.

Our interest has to be consumers, to ensure that their savings and investments will be secure in these institutions. We should also allow the institutions to compete more in the global economy and offer more choices for consumers. I am pleased to say, as my colleague has stated, we believe that will happen.

There are a couple of very positive aspects to the bill. We are pleased to see that the government left out the auto leasing and insurance sectors at this time. I agree with my colleague. I do not think it is appropriate to bring them in at this point in time. There was a lot of lobbying by financial institutions that wanted to get into the market. They recognized that they had huge lists of people to whom they could market and offer package services, from auto leasing to insurance to banking services.

The insurance and auto leasing sectors right now do a very good job and are very competitive. As the hon. member pointed out, it is inevitable that there will be changes in the years to come. We should prepare for them, but it is the right decision at this point in time not to go down that road.

I do have some concerns with the creation of a financial consumer agency of Canada. The agency will report directly to the Minister of Finance. We have seen over the last few weeks what happens when the government makes appointments based on politics, appointments which report to a minister as opposed to parliament where there is complete openness and transparency.

Even when in opposition the Liberals recognized that the ethics counsellor should report directly to parliament. In their very first campaign book in 1993, the Liberals stated that the ethics counsellor should report directly to parliament so that there is openness, transparency and a level of trust for the Canadian people. There have been decisions in recent months that have raised many concerns, yet members of parliament have no access to the reports.

The same concern is raised here with the financial consumer agency. It would report directly to the Minister of Finance, the same minister who I believe will be responsible for appointments to these agencies or boards, which may become a political dumping ground for defeated candidates or large donors to the government.

Some would say that is a bit biased, but the facts speak for themselves. We have seen that so much in the past. It does not end.

Let me read a recent press release. This is enough to make anybody throw up. On Friday, February 8, it stated: “The Minister of Citizenship and Immigration today announced the appointment of Lou Sekora of Coquitlam, B.C. as a part time citizenship judge”.

We all know that Mr. Sekora was defeated in the riding of Port Moody—Coquitlam—Port Coquitlam in the last election. When I phoned a few of my colleagues on the other side, Liberal members of parliament who are good friends, to tell them about the appointment, they started to laugh. They thought it was absolutely hilarious. It was pure, blatant partisanship.

Again, our concern is when there is not openness and transparency. I have a lot of respect for the Minister of Finance but when this type of legislation is introduced it lends itself to abuse. We tend to question whether appointments are based on politics or on the real needs of Canadians. That can happen down the road. I believe the finance committee should be given the opportunity to scrutinize and re-look at these appointments.

Those are some concerns we have in the official opposition. Again, I only speak from the record. We also see the massive problems with the ethics counsellor. We will be voting on that tomorrow night on the Canadian Alliance opposition supply day motion, where members of the government will have an opportunity to correct the very same wrong they have put into this legislation. They will have the opportunity to vote on a motion to have the ethics counsellor actually report to parliament and not to the Prime Minister.

I am sure my colleague from Prince George—Bulkley Valley, who is quarterbacking the legislation for the Canadian Alliance, will submit proposals to the bill when it goes to committee. However, there are a lot of positives in the bill that we are pleased with. It will give consumers more options and the financial institutions the environment where they will be able to compete globally, and we are going to a global economy. Those are some areas with which we are quite pleased.

The government member who first spoke on the bill talked about how it would help people on social assistance. It is an incredible stretch to suggest that lower service fees on bank accounts will help people on social assistance. It borderlines on preposterous to even suggest that.

The former premier of British Columbia, Mr. Glen Clark, came up with an idea somewhat similar to that by opening a credit union in one of the poorer neighbourhoods. He thought it would help those people. If the government really wants to help the people who are struggling to find jobs and get back on their feet, it should adopt some of the tax cut proposals put forward by the member for Medicine Hat over the last three years when he was the finance critic. We were pleased to see that the government, almost wholeheartedly, adopted a lot of the proposals contained in the member's 1998 report entitled “Competition: Choice You Can Bank On”, but we would have liked some things to have gone further.

If the government really wants to help people on social assistance who are struggling, who do need tax cuts and who do need a stronger economy where the business community can thrive, it would create economic opportunities for meaningful, long-lasting jobs. That would really help them. We will continue to push these ideas forward.

Under the new U.S. administration of President Bush, our neighbours to the south have embarked on a massive tax cut in the neighbourhood of $1.6 trillion. It believes that the economy is beginning to slow down in the United States. I agree with President Bush that those tax cuts will likely create more government revenues and create more meaningful and lasting jobs. It is the private sector that invests money into the businesses which creates opportunities for employment.

I do not believe the government can create lasting jobs. It can create short term jobs and do all types of funding, but at the end of the day it does not really create any kind of security for people.

I am pleased to speak to the bill and look forward to it going to committee. I am absolutely confident that we will be putting forward some amendments that will strengthen the bill. This is a time for all of us to support the bill, send it off to committee where the experts from the industry can scrutinize it and give us their input and then put forward some positive solutions to the bill.

Financial Consumer Agency Of Canada ActGovernment Orders

February 12th, 2001 / 11:30 a.m.
See context

Canadian Alliance

Dick Harris Canadian Alliance Prince George—Bulkley Valley, BC

Mr. Speaker, Bill C-8 is a bill to establish the financial consumer agency of Canada and to amend certain acts in relation to financial institutions. While we in the Canadian Alliance are very supportive of the bill in most respects, we maintain that the government has been very slow in modernizing the regulations in the acts that govern banking and financial institutions.

The government has been in power since 1993. This is the first major piece of banking legislation, or legislation covering the other types of institutions outlined in the bill, that the government has brought in. As a result of it being so slow to react to global conditions, the global economy and what has been happening in industry in other countries around the world, we have seen ourselves, our banks, our institutions, our securities companies and our life insurance companies being left considerably behind other countries that have been more forward thinking in modernizing the financial institutions in their country.

Canada should have played a more leading role in setting an example for other countries to follow. As parliamentarians know, we have one of the safest and finest banking financial services industry in the world. We have been for the most part very prudent in setting regulations and ensuring that Canadians had a good financial services system to serve them. At the same time, until 1993 we were quite forward thinking in providing the tools for our domestic banks to compete in global opportunities.

We had all the reasons to set Canada up as a standard throughout the world for other countries to follow. Unfortunately the Liberal government did not take that initiative. It has played the role of a follower rather than a leader. For all the talk about how much good the government has done and how much attention it has paid to this sector of our economy, it has not been the leader that it should have been.

That being said, I may now have some nice things to say about Bill C-8. It calls to modernize Canada's financial services industry. Canadian consumers have been demanding a more competitive financial services sector and more choices as to where they do their financial business. In addition, the players in the industry, the banks, the insurance companies and securities companies have been requesting more flexibility to catch up with their competitors in the global economy so that they can take part in opportunities.

By catching up, I refer to having the provisions to make acquisitions within Canada and having in place a formal merger approval process. If they decided that it would be in their best interests and the best interests of their customers to merge with another domestic bank, they would have a formal process to follow. They would not have to leave anything to chance nor would they have their proposals subject to interpretation by a number of different parties that have an interest in this merger.

Under the legislation there will be a formal process. One would assume that if this is a process that has some sound reasoning behind it, two banks will be able to sit down and say that this is the criteria they have to meet, these are the steps they have to take and if they do, they can expect, according to the legislation, approval of the merger. That allows them to do some long term planning.

In this business, as a bank or an insurance company, one has to be able to have that opportunity to look far beyond tomorrow, certainly in order to set one's business plans in place. We have some criticism with the five year sunset clause.

Even though the legislation took about seven years, and now the government has promised to review it in five years, I believe the financial services industry, while welcoming the five year renewal in relation to what we have gone through, would like to have the opportunity to see far beyond that. They would like to see 10, 15, 20 years down the road. The government perhaps could have put the sunset clause together a little differently or else left it out altogether. It could have simply had an ongoing review process where amendments to the act could easily be made rather than having a sunset review.

There are many aspects to the bill of almost 900 pages. While we have some areas of concern, I did state that it addresses many of the things the Canadian Alliance finance group, of which I am the critic when it comes to banks and financial institutions, has been pressing the government for a number of years to get with the program in relation to making some changes.

I think back to 1994 when I believe the first white paper was brought in by a former secretary of state who had many years in the banking industry. Nothing was done. I think back to a couple of years later when there was another study done. Again, nothing was done. Then we had the MacKay task force report which was about two years ago. Finally, we had the legislation ready to go and then the Prime Minister in his wisdom, wisdom and Liberals seems to be an oxymoron at times, called an early election. Bill C-38 died at that time.

While the secretary of state was delivering his address in closing, he thanked a number of people. I would like to point out to him that he forgot to thank the member for Prince George—Bulkley Valley. When I read over the legislation, I was quite flattered because I and our party were way ahead the government in the legislation.

In November 1998 I delivered a report to our caucus, and to anyone in the industry who cared to read it. It was called “Competition: Choice You Can Bank On”. It covered a whole myriad of things in the financial services sector. It was accepted by our party and was applauded by practically everyone in the financial services sector as a forward thinking plan for the future of financial services in Canada.

I am really flattered when I read the bill because our party and I used my 1998 report as a benchmark to scrutinize Bill C-38, now C-8. There is an astonishingly close similarity between what is in the legislation and what is in my November 1998 report. I am sure the secretary of state simply forgot to thank me. I know he read and reread my 1998 report in order to get a good grasp on what was needed to be put in here.

I want to talk about some of the points we support such as the legislation that allows a bank to develop into a holding structure. It is going to give banks far more flexibility to compete, particularly with foreign banks that are coming here, not necessarily establishing bricks and mortars but a credit card company, or banking by phone or lending by phone. This will greatly enhance our domestic banks to compete with foreign banks. Certainly we want foreign banks to establish their branches in Canada. It goes back to giving consumers choices. We support the new provision to allow the banks to restructure under a holding company.

We talked about increased access to the payment system which will allow life insurance companies and security companies to basically operate like banks as far as deposits and cash clearing. This will end the monopoly over the payment system that the banks have had and will increase the choices once again.

We talked about the ability for credit unions to expand into a national bank structure owned by one member one vote. We noticed that was not in the legislation, but we know that perhaps this will be dealt with in a separate piece of legislation. We are going to ask the secretary of state to put it on record. We support that principle.

The provision to allow banks to set up under a smaller capitalization is going to increase choice once again. Those parties will be able to set up smaller regional banks with an initial $5 million capitalization. I hope that investors who want to get into the banking business will take advantage of this provision. Again, we have increased choice for consumers.

I talked about the formal review process for mergers and we support that. We are quite pleased about the absence of the banks' ability to retail insurance and auto leasing through their branches. That has been left out of the bill and the prohibition still remains. There is no doubt that some day, sooner or later, the banks will be in the auto leasing and in the insurance business. I do not know if that is going to be such a bad thing. However, because that provision is not in the bill, it gives the auto leasing business and the insurance business, which is a very competitive and vibrant business in Canada, a chance now to begin to lay plans for the most assured entry of the banks into those businesses. It gives them some time.

I have talked to representatives from the industry and have said that the banks will not be out forever, but here is some breathing room. I told them not to miss the opportunity to start laying some plans for the impact of the banks coming into their business. I hope they are making plans to mitigate the impact of banks coming into that business.

When it comes to the financial consumer agency of Canada, our party has some concerns in as much as the agency will report to parliament through the Minister of Finance. We are quite concerned with the fact that within the bill there are tremendous powers given to the Minister of Finance. We believe those powers should be given to parliament, and by extension, the finance committee as opposed to the Minister of Finance.

I will talk about the financial consumers agency as an example. While the bill calls for that agency to report to parliament through the Minister of Finance, we would prefer that the agency report directly to the House. By extension, this would allow a review process to be done by an all party finance committee.

I think that would serve Canadians better in terms of openness and a non-partisan look at what the financial consumer agency has to say.

We hope we will be able to deal with this in committee. I know the government is anxious to make improvements to the legislation, perhaps through amendments in committee, and I am sure it will welcome that amendment with open arms and will get on with it.

I want to talk about the financial services ombudsman and, again, the financial consumer agency. I just hope and pray that this will not be another means for the Liberal government to give jobs to its friends, something we have seen so many times.

I expect a number of defeated Liberals may appear on these boards. I hope the government will be able to surprise us and that we will see some people who have never expressed any type of strong Liberal leanings, as impossible as that may sound, when it comes to government appointments. We will look forward to that. I see the hon. member nodding his head again so I know he likes the idea.

We will support the bill, of course, but we will raise our concerns through amendments. I want to straighten out the secretary of state. He seems to have the idea that regulating low cost bank accounts of $2, $3 and $4 a month will somehow get Canadians off welfare. I fail to see the direct correlation between having a bank account and getting off welfare.

There are a number of reasons why people are on welfare. First, people, through circumstances that are no fault of their own, are unable to work. We have a responsibility to look after such people through the social welfare system.

Second, there are those people who simply do not want to work and just love welfare Wednesday, and they will never work whether they have a low cost bank account or not.

There are other people on social assistance who would dearly love to work but unfortunately, in a number of the provinces and throughout the country, there simply are no jobs. This situation exists because while we have been able to generate quite a bit of revenue from our export economy, our domestic economy still needs a lot of help.

That means that the federal government, working in co-operation with provincial governments, could do far better in providing an environment that would ensure a buoyant economy right across the country, and not just in pockets where there are conservative governments such as in Ontario and Alberta, which have booming economies despite the deterrents presented by the Liberal government.

We would prefer that the government, instead of counting on low cost bank accounts to get people off welfare, took a serious look at how it has been curtailing economic growth and how this has not helped investors and businesses create new jobs for people on welfare.

I know my colleague from Saanich—Gulf Islands has a lot of good things to say about the bill, both from a supportive point of view and a critical point of view.

I look forward to committee, as I know do members of the government, the secretary of state, his parliamentary secretary and everyone connected with the bill on the finance committee. They are very anxious to see the amendments we put forward. They will appreciate the wisdom of them and be very supportive.

Financial Consumer Agency Of Canada ActGovernment Orders

February 12th, 2001 / 11 a.m.
See context

Willowdale Ontario

Liberal

Jim Peterson Liberalfor the Minister of Finance

moved that Bill C-8, an act to establish the Financial Consumer Agency of Canada and to amend certain acts in relation to financial institutions. be read the second time and referred to a committee.

Mr. Speaker, as everyone knows, Bill C-8 is a major bill, over 900 pages in length. It is, I believe, the biggest ever placed before the House. It is the outcome of a great deal of work and consultation in all sectors, including consumers and the members of the House of Commons. In fact, the latter had already seen this bill during the last parliament. At that time it was called Bill C-38.

With it, we aim to reform the strategic framework of the Canadian financial services sector, which comprises Canadian and foreign banks, trust companies, insurance companies, co-operative credit associations and other financial institutions. We have proposed a few minor changes to Bill C-38.

In essence this is the very same bill but with technical, grammatical and editorial improvements, as well as some clarifications where stakeholders identified points of confusion about the intent or application of the policies.

For example, the Canadian Bankers Association pointed out that under Bill C-38 it was unclear whether new financial sector holding companies could hold portfolio investments. The fact is that this is allowed and is now clearly stated. I thank the Canadian Bankers Association for its incredibly valuable input in the new bill, as well as that of all other industry and consumer driven stakeholder associations.

There can be no doubt that Canada's financial services sector is critical to us. It is critical as an industry, one of the truly great industries of the country, employing over 500,000 Canadians directly. It is highly export oriented, with more than 50% of the revenue from the insurers and the banks coming in from abroad. Most of the global taxes are paid in Canada, over 80%, and close to 90% of their global employees are in Canada. If we set out to devise through an industrial policy an industry that would be ideal for Canada, we could probably find none better than our financial services sector.

It is also important to us for the role it plays in our society and in our economy. After all, without financial intermediation, the capacity to deposit and withdraw funds, and to send funds around the world, where would we as individuals and our businesses be?

When we go abroad we find in many parts of the world that Canadian financial institutions are predominant in those foreign markets, giving a role of leadership not only to foreigners but also Canadians who want to do business in particular foreign jurisdictions. We have an important responsibility, therefore, to maintain the health and the vigour of this great industry.

Because they operate within a legislative framework determined by parliament it is essential that we have ongoing reviews of financial services legislation. This is probably the most extensive review that has ever been undertaken.

As a result of an extensive consultation going back to the MacKay task force which reported to parliament, the finance committee of the House and the Senate banking committee held extensive public hearings and reported back to us.

The minister then tabled before the House a white paper in June 1999, which again allowed for extensive consultation and input from all stakeholders. The bill was finally tabled last June as Bill C-38 and but for the election I am sure would have been law today. We are back to do the job, which is the culmination of all this great input.

There are four major themes in the bill. The first is encouraging the flexibility of our financial services both domestically and globally. To do so we have put in place a number of options and facilitating devices.

The first and probably most important is the holding company option. This means that our institutions will be able to compete in Canada with the foreign monolines such as credit card and lending companies that are coming here in an unregulated manner. We will give them that level playing field. It will also give them flexibility in the way they structure their Canadian and global operations.

The second point in terms of flexibility is that we are allowing a change in the ownership rules. This means that any shareholder, which under the current law would be limited to 10%, could go up to 20% of equity or 30% of non-voting shares. This is to give our institutions the flexibility to enter into strategic alliances and joint ventures with other institutions here and around the world.

The third area where we are helping them compete better is with respect to the merger review process. We have set out in the guidelines a process which must be followed for the major banks to enter into a merger.

This will offer certainty of process. At the same time it envisages hearings before both the Senate banking committee and the House of Commons finance committee. There is a great opportunity for public input because the final decision on mergers rests with the minister. He and Canadians must be convinced that any merger which takes place is in the best interest of all Canadians.

The second major thrust of the legislation is to encourage domestic competition in Canada. The reason for this is that we believe our customers are best served where there is vigorous competition in the marketplace.

How are we doing this? We want it to be easier for people to set up smaller banks or community based banks. This is why we are lowering the minimum capital that a bank must have or an institution must have from $10 million to $5 million. We think this will lead to new types of community banks.

We are also seeing under the evolution of this sector new banks associated with retailing institutions such as President's Choice Financial, a relationship between the Loblaws companies and CIBC which does their backroom work on a contract basis. This is a bank which now has over 400,000 customers and over $2 billion in assets.

Another way we are facilitating competition is with the new three tier size based ownership regime. If the equity is under $1 billion it can be wholly owned. Again this will help new banks to get established.

If the new size based ownership regime is between $1 billion and $5 billion, up to 65% of the shares can be owned or controlled by one shareholder and the rest must be the subject of a public float on the market. If the equity is over $5 billion, such as with our major banks and demutualized insurance companies, the rule is that these institutions should be widely held.

We are seeing new measures to encourage domestic competition with respect to credit unions, particularly those outside Quebec which do not have significant size and therefore economies of scale and are thus facing higher costs of operating and serving their customers who are also the owners of these unique community based institutions.

We have worked very closely with the credit union movement to help give them greater competitiveness. This is why, working with them, we have come up with an entity called a national service entity. This would allow them to combine to get economies of scale. It would enable them, for example, to issue a common credit card, and they could roll out new service offerings across provincial borders. This is a major step forward.

I will say a brief word about co-operative banks. This was a very important consideration brought forward by the MacKay committee and endorsed by the committees of the House and the other place. We have been working with the credit union movement to find out exactly what type of co-operative bank legislation should be brought forward. Unfortunately, the big group with whom we were working fell away from this project, but we have continued to study it and we will continue to study it, running on a parallel basis to Bill C-8. When the model is in place we will issue it and we will have extensive consultations, because we know there are provincial concerns and there are concerns within the credit union movement. We will subject that new measure to the same type of extensive input from the communities, the industries and the consumer groups, so that when we do come forward with the legislation it will meet the needs as expected.

A fourth way in which we are encouraging domestic competition here in Canada is through the entry of foreign banks via branches. This legislation was in place a couple of years ago, again as a result of extensive consultation, but we have enhanced it in this legislation to bring the foreign banking regime in Canada up to a level playing field with Canadian institutions, again requiring amendments in the legislation.

A fifth way in which we are encouraging domestic competition for the benefit of consumers is by opening up to the payment system the operations of life insurers, security dealers and money market mutual funds. This means that these new institutions would be able to have funds of a customer on hand and the customer would be able to exercise chequing privileges on that account, again enhancing competition.

The third major heading under this bill is the protection of customers. We think customers are best protected under any regime where there is maximum competition, so I have outlined what the government is doing in terms of enhancing competition. However, even with competition we have found in the past that there were those who remained unbanked; basic financial services were not available to them. This is why the government has taken measures under the heading of access. We are ensuring that Canadians have access to the financial services they need. We have introduced measures which would require the opening of accounts with a minimum amount of ID. Past credit or employment history, provided there is no fraud, would not be a bar to cashing government cheques.

As well, I have recently entered into a memorandum of understanding, a signed agreement, with eight of the large deposit taking institutions, which would make basic bank accounts available for Canadians. They are not all the same. This is not a cookie cutter, because we believe that competition will benefit consumers. However, each institution has come up with its own basic account with a minimum number of transactions, be they in person or via the Internet.

The costs are set forth and range among the five from $2.95 to $4 a month. We are making sure that those who can least afford it have access to the basic banking they need to get off welfare, to be able to deposit that cheque so it is safe and secure, and to pay their bills, including rent. This is important because, really, it is almost impossible to get off welfare if one does not have access to this type of basic banking.

As well, we have put in place rules for the closure of bank branches because that could be another way that access to basic services might be denied. We do not treat the banks as utilities; what we have said is that if they want to close a branch, that is their business decision. We are not going to force them to operate branches that are not profitable. That would undermine the strength of our financial services sector. However, what we have said is that they have to give notice. If the branch is in an urban area, they must give four months' notice so people can make alternative arrangements. If the branch is in a rural or less populated area, they must give six months' notice. This is so the community itself can find alternatives for the provision of these basic banking services.

Some of the alternatives will come from other institutions. With the closure of many branches in some of the western provinces, we have seen how provincial credit unions have come in and bought up those branches, at the same time ensuring ongoing employment to all of the employees who otherwise would have been affected. This is one of the virtues of giving notice. The federal government is also prepared to play a role in remote communities. Perhaps the post office could be the place people could look to for basic banking.

Another area where we have had the views and interests of consumers in mind is the financial consumer agency of Canada. Right now there are three federal departments in Ottawa that deal with enforcing our laws as they relate to consumers: Industry Canada, the Office of the Superintendent of Financial Institutions and the finance department itself. We are putting all of these operations under one roof. There will be savings in the costs of administration in so doing. It will be much more effective and efficient. We think this is a step forward for consumers.

We have had in place for a number of years the Canadian banking ombudsman. In this bill we are trying to expand the role of the Canadian banking ombudsman so that it covers all financial institutions. In an era of conglomeration where different types of financial institutions, such as banks, insurers and trust companies, are coming under the same ownership and the same roof, we think consumers would be better served if they could go to one dispute resolution centre for all their disputes regarding financial services, as opposed to having to find different ones depending upon what type of financial service they are having difficulties with. We also believe that the financial institutions sector will be better served by having this type of single dispute resolution centre.

Of course under the constitution we cannot mandate that entities which are not owned by banks have to come to this centre. That is why we have undertaken to work in very close co-operation with the joint forum of financial regulators from the provinces to find a way to bring together the disparate dispute resolution mechanisms aimed at helping consumers today. We welcome the efforts undertaken by Dina Palozzi of the Financial Services Commission of Ontario and Doug Hyndman from the British Columbia Securities Commission, who are heading up this task force which also has representation from the federal government.

The fourth major thrust of the bill is to ensure that on an ongoing basis we have responsible but responsive regulation of the sector. Of course safety and soundness have to be number one. That is why the bill has a number of measures which give enhanced powers to the Office of the Superintendent of Financial Institutions to intervene where there are difficulties, to remove directors if necessary and to impose fines where there is blatant disregard of our regulatory regime.

At the same time we want to ease the regulatory burden. This is why we are streamlining the approval system. Many approvals would be done on an exception basis: a request for an approval, if it goes to OSFI and is not denied within 30 days, would be deemed automatically passed.

It is critical as we go ahead that we have in place an evolving, dynamic regulatory regime, because we are seeing incredible changes with globalization, with exploding technology, with conglomeration and with consolidation, all of it taking place on a global basis. Our regulatory regime must be capable of keeping up with this. That is why in Bill C-8 we have reserved to the minister many areas of ministerial discretion. If it were there in black and white law, it would require an act of the House to change it. That is why we want, in many areas, to have this ministerial discretion.

As a minimum, within five years this law will sunset, again triggering, I hope, vigorous debate, with a telescope on the future looking at where the sector is heading, but because the changes in this industry and sector are so dynamic and so global, we cannot predict where they are going to be. We cannot predict what types of countermoves or accommodating moves we must make in order to ensure that we have a dynamic, competitive sector helping our consumers and competing globally. This is why we are committed as a government to reviewing the bill, not just five years from now but at any time sooner should it be necessary to do so, and then making the necessary changes.

In conclusion, I thank the stakeholders, the institutions, the financial sector, consumers' groups, members of this House and members of the other House. I particularly thank finance officials who have worked so assiduously on this, as well as those in OSFI and the other institutions, for bringing the bill to fruition in what I believe is a very responsible and critical way. Because the bill has had input from so many, I believe that it behooves us as parliamentarians to give it serious consideration. Because we have already had the input, I ask that it receive speedy passage. I would hope that it goes from this Chamber as quickly as possible into committee, where the real detailed work can be done and the witnesses can be heard.

Financial Consumer Agency Of Canada ActRoutine Proceedings

February 7th, 2001 / 3:05 p.m.
See context

Willowdale Ontario

Liberal

Jim Peterson Liberalfor Minister of Finance

moved for leave to introduce Bill C-8, an act to establish the Financial Consumer Agency of Canada and to amend certain acts in relation to financial institutions.

(Motions deemed adopted, bill read the first time and printed)