moved that Bill C-229, an act to amend the Bank Act and the Statistics Act (equity in community reinvestment), be read the second time and referred to a committee.
Madam Speaker, I would really have liked to ask the hon. member for Mississauga West a few questions; unfortunately, there is not enough time, but I think we have here a rather eloquent example of the wrong way to carry out one's role as a parliamentarian, by not taking into account the positive work of the opposition.
Each of us, as members of Parliament, have financial institutions in their ridings. Each of us, whether in large urban centres or in rural areas, have in our communities people who have been poorly served by financial institutions.
The bill before us has had a long life, given that I had the opportunity to introduce it on three occasions and it was debated twice already. Each time, the government refused to consider that, while we live in a democratic society, while we have a Charter of Human Rights and while there is a Superintendent of Financial Institutions, it is possible nonetheless that, in reality, the way banks are behaving may be such a concern that there may be a need to look beyond the border to find solutions to the problems we are experiencing.
In 1998, I travelled to the United States to study the community reinvestment act. This is a piece of legislation that was passed by the U.S. Congress in 1977. So this is second generation legislation. It was reviewed under the Clinton administration. Unbelievable as it may sound, given that the U.S. does not have a society with a propensity for interventionism and that Americans are strong believers in private enterprise and market forces, they passed legislation making it possible to assess how well financial institutions, mainly but not exclusively banks, meet the credit service needs of all consumers, and the most disadvantaged in particular.
Those who are well off, who earn a respectable income, are financially solvent, have no problems with financial institutions. Today's debate concerns those who are less well off and who are met with prejudice when it comes to their ability to honour their financial obligations.
I remember the time, just before the MacKay report was released, when we had to ask questions in the House on a regular basis because financial institutions refused to even consider opening a bank account for a person if he or she did not have three pieces of identification. Clearly, if a person was receiving social assistance or was thought to be economically disadvantaged, it was extremely difficult to open a bank account.
I will acknowledge that the situation has improved somewhat. An agreement was reached between the Canadian Bankers Association and the superintendent of financial institutions; now the banks do not require three pieces of identification, only one, and it has been agreed that a bank account cannot be denied someone simply because he or she is on social assistance. However not all bank branches and not all financial institutions follow this regulation to the letter.
I would also like to applaud some of the residents of Hochelaga—Maisonneuve. The Parliamentary Secretary to the Minister of Health knows this, there is no room for defeatism in this riding. If there is one area where the residents are dynamic, where they believe in standing together and where there is no place for resignation in policy, it is indeed the riding of Hochelaga—Maisonneuve.
Guy Biron, one of the most involved citizens in Hochelaga—Maisonneuve, put together a coalition; he is the chair of the senior citizens issue table, but that is not all he does. He is also involved with ASTA at the SHDM in Rouville. He is a man whom life has treated very well: he has a happy home life, has had children and contributes much to his community.
In 1977, this coalition made the following finding in the riding of Hochelaga—Maisonneuve. We are not going back 75 years. We are not talking about before industrialization. At the time, there were close to 30 financial institutions, 27 to be exact. Today, there are only 11 left. These 11 financial institutions include five banks. This shows how financial institutions have deserted poor communities. Option-Consommateur, which is a non profit organization, estimated that, over the past 20 years, in the City of Montreal alone, 150 bank branches have shut down.
Of course, these branches did not give advance notice and they did not care about the future of their clients. They shut down to streamline their operations. These branches leave without being at all concerned about the impact on our communities.
In a society like the United States, this situation would have been much more difficult, not impossible but much more difficult to watch. Why? Because the beauty of the Community Reinvestment Act is that it ensures that there is someone in the system to monitor how financial institutions fulfill their responsibilities.
Take the example of a bank like the Morgan Citizens Bank of New York. If it does not meet the credit needs of the Hispanic community or of the poorest segment of the Afro-American community, everyone will know about it on March 1 of each year, when those responsible for implementing the law release a report in which they assess institutions by giving them an A, B, C or D rating. This is somewhat like in school or in university.
Of course, the beauty of the community Reinvestment Act is that it ensures that consumer groups follow this public disclosure exercise. Banks must provide explanations when they stop their activities in certain areas. Consumers take this into consideration when the time comes for them to choose a financial institution. Not only do consumers take this into account when the time comes to choose a financial institution, but the bodies responsible for enforcing the law also take this into consideration when the time comes to authorize mergers or any other related operation.
It would not be that hard to have something similar to the community reinvestment act in Canada. Why is the government against such a bill? For a number of reasons. First, as we know, banks have one of the best lobbies on Parliament hill. Also, banks make large contributions to the Liberal Party's campaign chest. I certainly hope it is not the only reason for the government's action, although I am sure it has something to do with it.
As members of Parliament, we have to realize that we cannot fight poverty if we are not willing to instruct financial institutions to grant credit to each and every segment of society.
I regularly go over the reports of the Canadian Welfare Council, an organization set up to advise the Minister of Human Resources Development. Our society has not gotten any richer.
In 1968, Prime Minister Pierre Elliott Trudeau, as head of the Liberal Party, campaigned for a just society. There were concerns about poverty. Now, over three decades later, we realize that there are more and more poor people and an increasing concentration of wealth.
There is a paradox in my riding of Hochelaga—Maisonneuve. Although it is very poor, it is expanding economically. It is thought to be the next Plateau Mont-Royal. And as you know, Madam Speaker, you who are so well connected, the Plateau Mont-Royal is where artists meet and things happen in Montreal.
Hochelaga—Maisonneuve is said to be the next Plateau Mont-Royal. It is the place with the third-highest number of building permits, particularly where I live near the Olympic stadium. Young couples are abandoning the suburbs, abandoning the downtown core, and coming to settle in Hochelaga—Maisonneuve. That is understandable; anyone who lives there knows it is a great place to live.
There are four metro stations. We have rue Ontario. We have a good public transit system. There are a lot of strong community groups. Anyone who lives there knows it is a great place to live .
I can give one couple as an example. Jannie Beauchamp, a master's student, and her partner, also a master's student. They wanted to settle in Hochelaga—Maisonneuve and make it their home. They made a lot of preparations. They phoned 32 different insurance companies and all refused to insure them, as if Hochelaga—Maisonneuve were a disaster area.
This is exactly the practice that was used in the United States in the 1930s, 1940s and 1950s. It was called “redlining”; the financial institutions took the map of the States and circled certain areas in red, hence the name. These institutions systematically refused, regardless of the details in the file, regardless of the merits of the case, to lend money to people who lived in those areas.
We in Canada want to believe this is not so, not possible, but it is exactly what is happening. The financial institutions, the banks, practice systematic “red lining” style discrimination. As long as the legislator does not take the necessary steps to force the banks to explain themselves, to admit why they are totally deserting certain communities, the situation will continue unchanged.
There is no point in having a securities commission, no point trying to bolster the financial institutions if they do not acknowledge their responsibility to meet the credit needs of our entire population. Once again, this is not an excessive measure.
My bill recognizes, because it is just common sense, that banks cannot be asked to lend to people who are not creditworthy. They cannot be asked to adopt measures that would place them at a competitive disadvantage. We are just asking them to give people the tools they need to improve their well-being.
I will give you an example. In Hochelaga—Maisonneuve, within our community economic development corporations, these cooperation bodies that were created in the early 1990s, there are micro-credit circles, also known as borrowing circles. It means that people vouch for one another. If someone's washing machine breaks down at the end of the month and that person cannot easily find $300 or $400, he or she can have access to this kind of cooperation. If someone wants to start up a business and needs $300,000, $400,000 or $500,000, it is not so hard to find. But when a person needs $5,000, $6,000 or $7,000, it is complicated because financial institutions are not in that market.
These are examples where equity measures on the part of banks could enable them to invest in micro-credit activities. We are not talking here about billions of dollars. There are cases where partnerships could be formed with community groups, which is rarely done. I did not say never because, in Hochelaga—Maisonneuve, one bank gave its head office that had become vacant to a community group called L'Avenue. There is also the Caisse Maisonneuve that gave its head office to the Chantier de l'économie sociale. However, these examples seem to be exceptions in the sad track record of banks and financial institutions.
I will rise again later to conclude this debate, as I am allowed to do under the rules of this House. I hope that the government will agree to make my bill votable and that my bill will find support in each party.