This bill was last introduced in the 37th Parliament, 2nd Session, which ended in November 2003.
Anne McLellan Liberal
This bill has received Royal Assent and is now law.
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.
Financial InstitutionsOral Question Period
October 27th, 2003 / 2:40 p.m.
Vaughan—King—Aurora Ontario
Liberal
Maurizio Bevilacqua LiberalSecretary of State (International Financial Institutions)
Mr. Speaker, if the hon. member were to read Bill C-8, I am sure he would recognize that one of the major components of Bill C-8 is in fact consumer protection.
Also, above and beyond that, we have created the Financial Consumer Agency of Canada to address precisely some of those key concerns, as well as generate the type of competitive environment required so that people have choices.
Pierre Paquette Bloc Joliette, QC
Madam Speaker, I will begin by congratulating the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques for his presentation. This is no easy subject. In these 20 minutes he has managed to explain in layman's terms the key principles of the bill we have before us.
I would like to revisit one particular aspect, the one crucial for us, namely the regulation of financial markets and the recurring plan of the federal government to create a Canadian securities commission.
I imagine that everyone is well aware that the present finance minister has sought the advice of Harold MacKay in this undertaking—the selfsame Harold MacKay who authored the MacKay report, which led to Bill C-8, a bill we passed after the last election. Mr. MacKay proposed the creation of a wise persons' committee to advise the minister on the best route to take to regulate the securities market across Canada.
This wise persons' committee should soon submit its recommendation, which, as on many issues, is likely to be along the lines of establishing a Canadian securities commission. Membership would be voluntary, to put pressure on the provinces and Quebec as well. The Ontario Securities Commission clearly supports this initiative of a Canada-wide securities commission. The federal government's game plan will be to make sure all the provinces are onside, so as to isolate Quebec, and say, “Look, we are not forcing you to get onside, but since you are alone on your side, this will be a problem”.
I would like to ask the hon. member this: based on the questions he raised and what I just said, is the danger with Bill C-46 not a classic in terms of federal government interference, using a real problem and real concerns of the public—in this case, small investors and future retirees—about losing a portion of their savings because of financial fraud?
This is a real problem. We see it in the municipalities, which have financial needs with respect to infrastructures, we see it with child poverty. So, in response to a real problem, a real concern, a solution, be it legislative or financial, is proposed along with a slew of terms and conditions that result in us living in an increasingly centralized country, while what the Fathers of Confederation had in mind was a confederation. Without the guarantees the hon. member referred to, Bill C-46 may well become another part in this huge puzzle of the federal government intended to centralize Canada and make it a unitarian state.
That is my question for him.
Bryon Wilfert LiberalParliamentary Secretary to the Minister of Finance
Mr. Speaker, I am a bit surprised to be debating the issue of bank mergers, particularly when a very detailed report by the Standing Committee on Finance was finished in March 2003. Obviously my colleagues in the corner missed a lot of this review because they would not be raising an issue today which went through many months of detailed analysis.
We were charged by the Minister of Finance to look at the issue of public interest. Some of my colleagues believe that we cannot allow bank mergers. The fact is that Bill C-8, legislation which was before the House in 2001, allows for that.
The Minister of Finance asked us to look at the public interest. For the record I would like to make it very clear what it is he asked for. He asked that Canadians in all regions be able to have quality financial services, with special attention to the disabled, low income individuals and rural communities. He wanted us to look at the choice among financial service providers and the availability of financing for businesses, particularly small businesses and Canadians; creation of long term growth prospects for Canada; having more effective internationally competitive institutions; and adjustment and transition issues, including the treatment of employees. We took the minister's letter and evaluated the issue of public interest.
It is important for all Canadians to know that we have and will continue to have the strongest financial institutions, I would say, in the world. During the Great Depression of the 1930s the banks in the United States folded like cards. The banks in Canada did not. We did not have any bank failures.
The process began. The banks were brought before the standing committee. All sorts of interested stakeholders were brought before the standing committee to evaluate these issues. We did not take these issues lightly.
The review process is important. Obviously the banks may make a decision and it may be based on whether or not they feel they can be competitive internationally. They are going to make a business decision. It is up to us as parliamentarians to evaluate the public interest to see if it will be served and how best to respond.
We produced a report with 11 key recommendations. I would invite members of the New Democratic Party to read them sometime. They will find that the recommendations address the issues that were presented by the minister in his letter.
The discussions with the banks in terms of issues were wide ranging. Any proposal, if it were to come forth, would be reviewed by the Competition Bureau. The Competition Bureau is going to look at the issue of competition in areas across the country. The Office of the Superintendent of Financial Institutions plays a key role. It analyzes any proposed merger with respect to the soundness and stability of the banking system. The Standing Committee on Banking, Trade and Commerce in the other place and the House of Commons finance committee were asked to look at the public interest.
The majority of the witnesses who came forward indicated very clearly that we have strong financial institutions. Some did not want to see any changes. Some of the members were suggesting earlier that some of the banks were closing in their ridings. I am sympathetic to that, but that is a decision the banks make and they would go ahead whether or not there are mergers. The decision to open branches in certain areas is based on the needs as perceived by those particular banks. Obviously there are procedures in place to deal with notification issues, et cetera.
The finance committee was charged with the responsibility of seeing how the public interest would be dealt with. Dealing with and defining the public interest in anything is very difficult. It depends upon whom we are talking about in the public. The various stakeholders range from bank presidents to interest groups to community organizations who are concerned, and legitimately so, about the state of financial institutions and the implications if there were to be mergers.
There have been no proposals presented, but we wanted to be proactive as a committee to make recommendations to the minister. There is a procedure, as members know. The minister is going to report later this month on the recommendations. What I find interesting is that the New Democratic Party would have us move concurrence when the fact is that we have asked the minister to respond to the report.
I want to know what the point is of producing a detailed and thoughtful report by parliamentarians on which the official opposition agreed, except for my friends in the corner who did not agree and that is their right, in which we asked the minister to respond. Now that the minister will be responding, the NDP want to jump the gun. That does not make any sense. Why would we spend all that time putting forth a detailed report, asking the minister to look at some very important recommendations which we believe will advance the public interest and are important to the public interest and will help in shaping the minister's response to the recommendations? No, the NDP would rather spend time in the House today talking about something with which we have dealt and are waiting for a response under the guidelines and the timelines granted to the committee and to the minister.
The minister will fulfill that timeline and in doing so, we will get a detailed response. If members in the House do not like the minister's response, they have every right to say so and they can respond accordingly. But to jump the gun, to jump the queue before the minister responds makes no sense.
If members of the New Democratic Party were to read the report in detail, they would realize, and in their own dissenting report they would at least be able to say that it has had a fair hearing before the minister. If they do not like the recommendations, so be it.
In my view, they would rather play politics here and waste the time of the House by talking about something because they do not want to talk about something else which is of importance to Canadians as well. We all know that, but this is the way this institution works.
Let us talk about some of the key issues in that report that we addressed to the minister.
The issue of access is important to Canadians whether they live in a big city, in rural Canada or remote places. My New Democratic friends would agree with that as well. The issue then becomes, what kind of services? Are we talking about full banking services?
Today in the age of technology we can go to ATM machines, but some ATM machines are not convenient for people because they may not have a full range of services. People may not be able to use a particular card or the machines may not have the kind of transactions that they would like. They may be okay to take the money out but they may not necessarily be good for bill payments and other things. That came out during the discussions. We talked about access issues, saying that there needs to be full service access, whether it is through bricks and mortar or machines. They have to provide access to Canadians wherever they live and it needs to be high quality.
Jobs are also important. People who live in a rural community where the only bank in that community has closed may want to take out a loan. What happens then? They knew the bank manager in their community but now they have to go 100 kilometres down the road to a bank where no one knows them. Those issues were brought to our attention and we responded.
The Bank of Montreal said that its strategic plan was to deal with small business loans. Its niche in the banking sector is small business. That is what it wants to deal with and it wants to expand on that market. It was not necessarily so for other banks, but they all look at the issue of how they can take care of their customers. Banks are no different from anything else. Obviously if they do not have customers, they are not going to have profits. If they do not have profits, they are not going to do very well. Naturally those were issues we wanted to deal with. As I said, that was an important issue.
We know that if any bank mergers were to occur, people in the big cities would be all right, primarily because of the concentration and number of financial services available in large cities, but that is not so in rural and remote communities. This was a very important point which we stressed in the report. Again I would suggest that my friends in the New Democratic Party may want to read it.
On the other hand, I know the NDP has talked about employment issues. We certainly tried to address some of the issues in the report, such as job protection for Canadians who work in these financial institutions, early retirement and what things can be done to make sure, through attrition or whatever it happens to be, that we do not have a great dislocation, particularly for people on the front lines.
One of the issues that the financial institutions talked about was the issue of competitiveness internationally. We have six very strong banks in this country and yet they have to compete on a global scale. What is the impact on a global scale? Is there a strong rationale to do so?
I said that we have very strong financial institutions in this country, and we do. In fact, we can be proud that they operate efficiently and that we have not had the collapses that we have seen in other jurisdictions.
The discussion of course is, on scale, on international competitiveness, which was one of the major issues the banks addressed. Another issue they addressed had to do with the whole issue of shareholder value. They also talked about the health of the financial service sector.
From our standpoint, obviously we are concerned about whether these institutions will be able to deliver in this market and what they may do elsewhere. We know, for example, that 50% of the Bank of Nova Scotia's profits comes from overseas, particularly in areas in the Caribbean. That is where it decided to focus its particular niche.
However we wanted to make sure that, in terms of addressing the minister's letter, we responded effectively, which is why the March report was presented.
Normally, when committees present their reports they wait to hear from the minister. Hopefully the ministers, when they read those reports, and I know they read them very carefully, will respond effectively to those 11 recommendations. I know the Minister of Finance is very much interested in what we have to say or he would not have asked us to undertake the issue of public interest.
The fact that we have done that and that we are now waiting for a response from the minister within the prescribed timeframe, it seems a bit strange that today we would try to, in my view, hijack the House by suggesting that we need to deal with an issue for which a report has already been presented, and trying to say that we are not getting a response. The fact is that we are doing it under the prescribed timetable that the committee works under and that the minister works under.
I can tell the House that the Minister of Finance will respond in a way in which he will look very carefully at the 11 recommendations because it is not only important to members of the House, it is important to every Canadian. Every Canadian has the right to know the approach the government will be taking. I can assure members that is one thing the Minister of Finance will do and he will be do it effectively .
It is also important to note that, as I said, we do not want to mix apples and oranges.
Bill C-8, as we know, was the Financial Consumer Agency of Canada Act . We know that under that legislation the issue of mergers was allowed. What the minister is trying to find out is how that can be further clarified in terms of the public interest, and therefore if banks wanted to merge tomorrow they could make a proposal.
The fact that they have not presented a proposal means that they are waiting. They are not jumping the gun. They are waiting to hear what the minister has to say. Only the NDP wants to jump the gun. However Canadians and the banks want to hear what the minister has to say, as do, I believe, all members in the House. When that comes down, I would then expect a full and thorough discussion, as it should be.
We listened to many witnesses who made very thoughtful and useful presentations to members of the Standing Committee on Finance. We were able to look at the issues very carefully and to dissect some of the key problems that people were seeing out there.
We were not just focusing on large urban communities but also on rural and northern communities to make sure that if we were going to do it we would do it right. If we are going to allow something, we want to do it right because 70% of the mergers generally across the globe fail and therefore we want to make sure that it is done right. The New Democratic Party wants to rush it but we do not. We want to make sure it is done right.
I hope those members will give the minister the ability to present his report and for us to be able to then respond. I have great faith in the fact that the Minister of Finance will do so in a very timely manner.
At this point, as we wind down to our question period, we are faced with the issue of what the guidelines are and what we want the minister to evaluate. He has 11 key recommendations that deal with the issues of access, competition and employment. Those are important issues and they need to be addressed under the timelines and guidelines set out by Parliament. Otherwise we will have a response that will not do justice to the committee report.
I congratulate all my colleagues who were on the committee and who spent long hours to make sure we heard from Canadians and various stakeholders in order to do our job effectively. The report, which the minister has been looking at, is one for which we are very pleased. I can tell the House that when the minister responds I expect we will be able to evaluate his response and say where it is that we agree. Hopefully, we will agree on everything, but if we do not, at least we will have had a fair hearing.
One of our responsibilities as parliamentarians is that we do not have to agree but we have to talk about the process, and nobody has complained about the process. I want to make it very clear that the process is important to us and to all Canadians.
I hope my New Democratic friends will read the recommendations, because clearly they must have missed them. They also must have missed their own minority report because obviously if they had read it they would know that they were asking the minister to respond, and that of course is what we are trying to do.
John Manley LiberalDeputy Prime Minister and Minister of Finance
Mr. Speaker, first, I have said that we will respond within the timeframe for which the committee asked, which is more rapid than the House rules provide.
Second, I do not know what his concern is about the last five years. Bill C-8 was introduced, was adopted by the House and provides a clear set of rules to deal with mergers.
We have asked the committee to provide greater clarity about one aspect of the elements required for a bank merger to be considered.
Maurizio Bevilacqua LiberalSecretary of State (International Financial Institutions)
Mr. Speaker, I want to thank the hon. member for her question. I know it is an issue that she cares about as much as we do. As the hon. member would remember by reading Bill C-8, she would understand that consumer protection is indeed a major part of Bill C-8 that deals precisely with the issues with which she is concerned.
Maurizio Bevilacqua LiberalSecretary of State (International Financial Institutions)
Mr. Speaker, I do not agree with the premise of the hon. member's question. The financial service sector is indeed a very important sector in the Canadian economy, providing valuable services for Canadians and small businesses from coast to coast to coast.
In reference to the issue of consumer protection, the hon. member should remember that one of the largest components of Bill C-8 dealt with consumer protection. There is no question about the fact that the government understands the needs of consumers and we do that quite well.
Banking InstitutionsOral Question Period
February 27th, 2003 / 2:50 p.m.
Vaughan—King—Aurora Ontario
Liberal
Maurizio Bevilacqua LiberalSecretary of State (International Financial Institutions)
Mr. Speaker, actually the largest component of Bill C-8 was consumer protection. That is precisely what we have done. We will continue to do that whether or not the hon. member shouts along the way.
Our priority is to make sure that the interests of consumers are safeguarded and the measures taken by Bill C-8, including the establishment of the Financial Consumer Agency of Canada, speak to that reality.
Banking InstitutionsOral Question Period
February 27th, 2003 / 2:50 p.m.
Vaughan—King—Aurora Ontario
Liberal
Maurizio Bevilacqua LiberalSecretary of State (International Financial Institutions)
Mr. Speaker, I thank the hon. member for his question because it is an area for which the government truly cares, which is the reason we introduced Bill C-8, precisely to take care of concerns as cited by the hon. member.
I know the hon. member is an individual who follows the file so he probably knows that the regulations were pre-published on November 30, 2002.
Don Boudria Liberal Glengarry—Prescott—Russell, ON
Mr. Speaker, not only have we had six days of debate on the throne speech, we have had: the successful Kyoto resolution, which was adopted by the other place yesterday, I might add; the implementation of the Prime Minister's ethics package, by a draft bill, of the independent ethics commissioner; a code of conduct for parliamentarians; the Romanow commission report; the passing of Bill C-8 on pest control; the passing of Bill C-13 on human reproduction, as we did yesterday; and the Species at Risk Act having royal assent.
Mr. Speaker, no doubt you will recognize a supplementary so I can add to this.
The Speaker
I have the honour to inform the House that when the House went up to the Senate chamber, Her Excellency the Governor General was pleased to give, in Her Majesty's name, the royal assent to the following bills:
Bill S-2, An Act to implement an agreement, conventions and protocols concluded between Canada and Kuwait, Mongolia, the United Arab Emirates, Moldova, Norway, Belgium and Italy for the avoidance of double taxation and the prevention of fiscal evasion and to amend the enacted text of three tax treaties—Chapter 24
Bill C-14, An Act providing for controls on the export, import or transit across Canada of rough diamonds and for a certification scheme for the export of rough diamonds in order to meet Canada's obligations under the Kimberley Process—Chapter 25.
Bill C-11, An Act to amend the Copyright Act—Chapter 26.
Bill C-21, An Act for granting to Her Majesty certain sums of money for the public service of Canada for the financial year ending March 31, 2003—Chapter 27.
Bill C-8, An Act to protect human health and safety and the environment by regulating products used for the control of pests—Chapter 28.
Bill C-5, An Act respecting the protection of wildlife species at risk in Canada—Chapter 29.
Maurizio Bevilacqua LiberalSecretary of State (International Financial Institutions)
Mr. Speaker, it is evident from the hon. member's question that she did not follow the Bill C-8 debate where we took a number of measures to help consumers deal with these particular concerns. I know the hon. member will take the time to review Bill C-8 and she will find that many measures have already been taken.
John Manley LiberalDeputy Prime Minister and Minister of Finance
Mr. Speaker, I refer the hon. member to the Bank Act and to Bill C-8 in the last session, rather than to whatever day's newspaper he may have been reading.
Financial InstitutionsOral Question Period
October 31st, 2002 / 2:45 p.m.
Ottawa South Ontario
Liberal
John Manley LiberalDeputy Prime Minister and Minister of Finance
Mr. Speaker, there was no decision to reverse. There is a law. It was passed last year in the House, called Bill C-8. It provides for formal applications for mergers. If banks wish to make a proposal under the law, they are perfectly free to do so.
Anne McLellan LiberalMinister of Health
moved for leave to introduce Bill C-8, an act to protect human health and safety and the environment by regulating products used for the control of pests.
Mr. Speaker, this bill is in the same form as Bill C-53 from the first session of this Parliament. In accordance with the special order of the House of October 7, I request that it be reinstated at the same stage that it had reached at the time of prorogation.
(Motions deemed adopted, bill read the first time and printed)