Bill C-26 (Historical)

An Act to amend the Criminal Code (criminal interest rate)

This enactment amends the Criminal Code by exempting persons from the application of section 347 of that Act in respect of agreements for small, short-term loans. The exemption applies to persons who are licensed or otherwise authorized to enter into such agreements by designated provinces that have legislative measures that protect recipients of payday loans and that specify a limit on the total cost of those loans.

Criminal Code

[Rob Nicholson, Conservative, Minister of Justice and Attorney General of Canada]

moved that Bill C-26, An Act to amend the Criminal Code (criminal interest rate), be read the third time and passed.

[Rob Moore, Conservative, Parliamentary Secretary to the Minister of Justice and Attorney General of Canada]

Mr. Speaker, today it is my pleasure to rise in support of Bill C-26, An Act to amend the Criminal Code (criminal interest rate). The bill has come to be described as the payday lending bill because the amendments that it proposes are targeted at the payday lending industry, an industry which has quickly established itself in Canada but which to date has operated in an essentially unregulated environment.

Bill C-26 proposes amendments to the Criminal Code which will assist in remedying this. The bill is about greater consumer protection for the estimated two million Canadians and their families who use the services of payday lenders on an annual basis. The bill reflects the government's continuing commitment and dedication to improving the lives of all Canadians.

I am proud to speak in strong support of Bill C-26 and I urge all hon. members to join with me to ensure its quick passage into law.

The payday lending industry is flourishing in Canada. The industry first originated in the United States before moving north to Canada in the mid-nineties. Since that time the industry has grown rapidly with an estimated 1,300 payday lending outlets operating across Canada. The industry's principal lobby group, the Canadian Payday Loan Association, notes that there are approximately two million payday loan transactions annually in Canada.

A report prepared by the Public Interest Advocacy Centre in 2002 estimated that between 1 million and 1.4 million Canadians used the service of payday lenders, so the numbers appear to be going up. We also know that nearly $2 billion is borrowed through payday loan centres on an annual basis. These numbers frankly are astounding. Yet, what is most surprising is that the rapid growth of this industry has occurred in the absence of any industry specific regulatory framework. The absence of this framework has left consumers vulnerable to questionable business practices.

Some might ask why would any person choose to use the services of a payday loan centre if doing so puts the individual at risk of some unscrupulous lenders. The reasons are many. Some consumers use the services of the industry because it is a relatively easy, fast and anonymous way to borrow money. Others have suggested that the reason is that payday lenders offer convenience, including the extended hours of operation and the prevalence of such centres in communities across Canada.

This, combined with the fact that many small towns and cities across Canada are losing their local banking branches, makes the payday loan store an attractive way to access one's money. However, it is those consumers who have come to rely upon payday loans in order to pay their bills, to have enough money to put food on the table, and get by from paycheque to paycheque, who are the most vulnerable to abuse.

It is precisely these facts which place already vulnerable consumers into an even more vulnerable position as they may be willing to accept the terms of a loan without question or out of sheer necessity. That is why it is imperative that we move quickly and ensure that Bill C-26 becomes law.

A payday loan has really become a catchy moniker for what is otherwise a short term loan, often for a small amount, secured against proof of one's income. Most often it is demonstrated through proof of employment and hence the term payday loan. This need not be the case however. Other examples include pension income.

A typical payday loan is usually in the range of $300 and lasts for about 10 days. To qualify, in addition to demonstrating an income source, the consumer must have a bank account and provide a post-dated cheque for the amount of money borrowed, plus the associated fees and interest owed on the loan. These fees can include application fees, brokerage fees, administration fees or processing fees and so on.

We all know that payday lending is a very expensive way to borrow money. In some cases estimates for the interest rates charged when calculated on an annual basis reach into the thousands and even tens of thousands of per cent. With rates like that it is no wonder that the profits for payday lending companies continue to go up and the industry continues to thrive.

For better or for worse the reality for the payday lending industry in Canada appears to be right, but the reality for some of its consumers is less so. When consumers have difficulty paying back the loan, lenders may let one short term loan rollover into the next and so on. Debt load goes up, and the already struggling consumers find themselves in a position where the debt load is spiralling out of control.

When they are unable to pay back their loan, there have been concerns expressed with respect to the debt collection practices employed by certain segments of the industry. Oftentimes the borrower may have been unaware of the many terms and conditions associated with the lending agreement, those aspects of the loan that one could expect to find buried among the fine print.

This is confirmed by the Public Interest Advocacy Centre in a report entitled “Fringe Lending and Alternative Banking: the Consumer Experience”, which notes that most consumers of alternative financial services such as payday lending are unaware of the cost of the services they use.

This government believes that consumers should be afforded effective consumer protection from this industry. That is why Bill C-26 is so important.

Many, including the provinces and territories as well as consumer advocacy groups, have said that section 347 of the Criminal Code remains a barrier to the effective regulation of the payday lending industry in Canada. The provinces and territories have said that they will not take steps to regulate the payday lending industry when section 347 makes such activity technically illegal.

Section 347 is the usury provision. It creates two specific offences: one, to enter into an agreement or arrangement to receive interest at an annual rate exceeding 60%; and two, to receive payment or partial payment of interest exceeding 60%.

While these provisions were enacted to combat the practice of loansharking, the reality is that they also apply to most lending arrangements in Canada, including payday lending. Bill C-26 therefore proposes to amend section 347 of the Criminal Code and thereby clear the way for the provinces and territories and provide the flexibility they need to regulate the payday lending industry.

The amendments proposed by Bill C-26 are not long and they are not complicated. Essentially they carve out a limited exemption from the applicability of section 347 for payday lenders in prescribed circumstances. By proceeding in this fashion and crafting a narrow exception rather than repealing section 347 in its entirety, Bill C-26 ensures that all Canadians will be afforded protection from the exploitative practices of loansharking while at the same time responding to the needs of the provinces and territories in relation to the payday lending industry.

The proposed exemption scheme would be established under a new section, proposed section 347.1. This new section prescribes the exact circumstances that would need to exist in order for a payday loan to be exempt from section 347.

First, Bill C-26 proposes to define a payday loan for the purposes of the exemption. This definition is important because it ensures that only a clearly defined class of lending arrangements will be eligible for being exempt. As such, “payday loan” is defined to mean as follows:

--an advancement of money in exchange for a post-dated cheque, a pre-authorized debit or a future payment of a similar nature but not for any guarantee, suretyship, overdraft protection or security on property and not through a margin loan, pawnbroking, a line of credit or a credit card.

In my opinion this definition is appropriate. It appropriately captures the typical payday loan scenario that I described earlier and provides the precision necessary to specify which loans will be captured by the exemption and which ones, where the policy considerations are different, will not be eligible.

Bill C-26 proposes three requirements that must be present before a payday loan will be exempt from section 347. First is that the loan amount not exceed $1,500 and be for a term that is less than 62 days. As such, not all payday loans will be eligible for exemption, only those that fall within these further restrictions. These limits appropriately reflect the fact that payday loans are generally for a small sum over a short period of time.

Second, the payday lender must be licensed or otherwise authorized by the province in which it operates to enter into a payday lending arrangement. This is the crucial component of the amendments proposed by Bill C-26, because this requirement will ensure that for an exemption to apply there must first be laws in place to govern payday lending in the province in question. Ultimately, it will be up to the provinces and territories to decide whether and, in virtually all respects, the extent to which they will legislate.

The only requirement that Bill C-26 requires in relation to the provincial legislative framework for the exemption to apply is that there be a prescribed limit on the total cost of borrowing. This makes sense. This requirement will ensure consumers know exactly how much they are paying for accessing a payday loan.

Finally, Bill C-26 provides that if a province or territory wishes to regulate the payday lending industry in a manner which would exempt payday lenders from section 347 of the Criminal Code, then they will also be required to be designated by the federal government.

Not all provinces will wish to or need to do this. For example, in Quebec lending at more than 35% is prohibited, so there is no need for an exemption in that province. In other cases, the designation will be required.

Seeking this designation is very straightforward. For such a designation, a province would write to the federal Minister of Justice and indicate that it has legislative means in place that provide consumer protection measures for those who seek payday loans, including, as noted already, a limit on the total cost to consumers for payday borrowing.

Upon the province's indication that requirements for an exemption have been met, and upon the recommendation of the federal Minister of Industry, the Minister of Justice would then recommend to the governor in council that the exemption be made.

Importantly, this designation can be rescinded at any point at the federal level in those instances where the province no longer meets the requirements for the designation or where the rescission has been requested by the province. This is a pragmatic and sensible approach in a country as vast and diverse as ours. The decision on how to regulate the payday lending industry will be entirely up to the provinces.

Indeed, consumer protection measures fall within the constitutional competence of the provinces and territories. The provinces already have consumer protection legislation designed to address the specific concerns and realities of their jurisdictions and they are the best place to identify the components that are necessary to ensure effective consumer protection within their own jurisdiction.

The approach provided for in Bill C-26 complements this existing provincial legislative framework. I support this approach. It makes sense and will facilitate greater regulation of the payday lending industry across Canada.

Contrary to what some might say, Bill C-26 is neither encroaching upon provincial jurisdiction in relation to consumer protection measures nor necessitating that provincial governments seek a federal blessing or stamp of approval for its consumer protection measures.

In fact, Bill C-26 does quite the opposite. Bill C-26 would amend the Criminal Code to provide the provinces and territories with the flexibility they need, and indeed, the flexibility they have requested, to enact consumer protection measures within their jurisdiction to better regulate the payday lending industry.

As I mentioned, many jurisdictions have indicated that section 347 of the Criminal Code hampers their ability to enact consumer protection legislation within their own jurisdiction. By removing this barrier, Bill C-26 will facilitate greater regulation at the provincial level and meet the needs of consumers and the groups who have advocated on their behalf.

These proposed amendments are long overdue. As I noted earlier, the payday lending industry originated in the United States before spreading north into western Canada in the mid-1990s. In the United States, many state legislatures have taken the necessary steps to regulate this industry in order to protect their consumers from unscrupulous business practices.

To name only a few, California, Vermont, Michigan, Mississippi, New York and Virginia all have legislation in place to regulate the payday lending industry. While the exact content of the legislation varies from place to place, common features of payday lending legislation in the United States include limits on the amount of money that can be borrowed as well as the cost associated with the loan.

We see the same thing happening right here in Canada. Already, Manitoba and Nova Scotia have enacted legislation in their provinces to provide greater consumer protection for those who use the services of payday lenders. In Manitoba, for example, the Consumer Protection Amendment Act received royal assent on December 7 of last year. In Nova Scotia, the Consumer Protection Act was amended and received royal assent on November 23 of last year.

Both of these pieces of legislation are specifically designed to regulate the payday lending industry in those provinces. They include requirements for lenders and set out rights for the borrower, and both provide that a maximum will be set on the amount that can be charged for a payday loan. Both of these pieces of legislation are not yet in force and are in fact awaiting the passage of Bill C-26 before taking effect.

The governments of Manitoba and Nova Scotia are watching the progress of Bill C-26 because its passage will ultimately mean greater protection and greater regulation for the industry, which of course will be of benefit to consumers in those provinces. Other provinces have indicated they will follow suit.

With the passage of Bill C-26, the provinces and territories will have greater flexibility in addressing the payday lending industry within their own jurisdictions. The approach we are taking is the right one.

In closing, the protection of Canadian consumers is something on which we can all agree, and I believe that Bill C-26 will provide for this. I urge all hon. members to join me in supporting its quick passage into law.

[Charles Hubbard, Liberal, Miramichi, NB]

Mr. Speaker, the parliamentary secretary alluded to similar activities in Nova Scotia and Manitoba in terms of their legislation. I am wondering if he is able to give the House some direction in terms of administrative fees and other costs that go with payday loans.

[Rob Moore, Conservative, Fundy Royal, NB]

Mr. Speaker, that is a good question. Earlier in my speech I mentioned the total annual cost of borrowing, including all fees, some of which I named, and the interest that is charged. Worked out annually it could be over 100%, 200%, 300% or even 1000%. It is in fact the fees that are adding to the overall cost of borrowing, as well as the interest.

What is important to note is that Nova Scotia and Manitoba have taken up the call to protect their consumers in their respective provinces. They have put in place a framework that will put a maximum in place in regard to protection for consumers so that there can be a better understanding of the relationship that the consumer is entering into with a payday lending institution.

But in order for them to feel comfortable in enacting that legislation, in making that legislation the law, they first require the passage of this bill, Bill C-26, which would amend the Criminal Code and in fact would pave the way for the provinces to bring in their own frameworks, frameworks that are appropriate for each province.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, Bill C-26 is a blatant example of the Conservatives saying one thing, but doing something else. They claim to want to use a different approach with the provinces and to respect their jurisdictions, but in this case Quebec has had its own Consumer Protection Act for years, to deal with payday loans.

In fact, this industry barely exists in Quebec, because we have eliminated excessive rates. The annual interest rate must be indicated on loan contracts, and the courts have established that an annual interest rate above 35% is excessive. In other words, we already have the tools to legislate this area.

I realize that the other provinces want some legislation, but this is a matter of regulating commercial practices and comes under provincial jurisdiction.

Why did the federal government not simply say that, where relevant legislation exists, such legislation will apply?

The Consumer Protection Act has been in effect for over two decades and it is working very well in Quebec. In committee, we suggested that this be indicated in the legislation, but that proposal was rejected by the other three parties, which completely ignored the fact that Quebec's experience in this regard is conclusive.

Why does the federal government not accept that we simply indicate this in the act, instead of having the Prime Minister give his blessing and the governor in council decide whether or not the Quebec legislation is acceptable?

The government could simply have said that, if a province already has an act, that legislation will continue to apply, and where new legislation is passed, such legislation will have been determined by the provinces.

How do we explain this discrepancy between the Conservatives' rhetoric and the respect for provincial jurisdictions? In the case of payday loans, Quebec has long had in place a tool that is recognized as adequate and acceptable.

The Conservative government has decided to adopt the same attitude as its predecessor and as federal governments in general. This means that the federal government will impose the same measure across the country, without taking into consideration the initiatives implemented by various provinces.

Why does the Conservative government not show good faith for once and accept such an amendment, so that we have an act that will adequately serve Canada, while respecting the practice that has been in use for decades in Quebec?

[Rob Moore, Conservative, Fundy Royal, NB]

Mr. Speaker, I listened with interest to the hon. member's question. My speech basically refutes everything the hon. member just said. I said very clearly that not all provinces would wish to or need to do this. For example, in Quebec lending at more than 35% is prohibited, so there is no need for an exemption in that province. In other cases the designation will be required.

As the hon. member correctly pointed out, this means that Quebec has essentially banned the practice of payday lending and payday lending institutions by implementing a 35% cap on the maximum amount of interest that can be meted out in a loan agreement. The other provinces are calling for us to pave the way by amending the Criminal Code, which prohibits an amount that would equal over 60% and makes it a criminal offence to charge interest at a rate over that amount. I mentioned that in my speech. The provinces do not feel comfortable bringing in their own legislative frameworks to accommodate their consumers until we at the federal level pull away from that area of jurisdiction.

Quite to the contrary, we are actually recognizing the competence and the jurisdiction of each province to put in place its own framework. Quebec has done so. Manitoba and Nova Scotia have also done so. The approach that Manitoba and Nova Scotia wish to take requires Bill C-26 to pass. This would allow provinces to legislate in this area to protect their own consumers.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, coming from the province of Manitoba, we are anxiously awaiting Bill C-26 to pass. We see it as the enabling legislation so we can start to rein in this burgeoning industry, the payday lenders that are sprouting up like mushrooms in the inner city riding that I represent. They are an absolute scourge on the poor.

It is not any wonder that they are burgeoning and popping up in virtually every vacancy and every strip mall one can imagine. They are not just charging 60%, or 100%, or 1000% interest, some are charging 10,000% interest, according to independent studies done by the University of Winnipeg. Even the old leg-breaking loan sharks could not make money like that. There is no single thing one could do in the country to make 10,000% interest. I am told that selling cocaine does not get one 10,000% interest.

We are anxiously awaiting the implementation of the bill.

However, why were they not prosecuting these people all along? Why did successive governments ignore the fact that these guys were charging usurious rates, clearly against the Criminal Code of Canada and clearly undermining the financial stability of the inner city of Winnipeg and other cities. What possible reason could they have for not busting these guys? Why were these underworld figures, who run these payday lending outfits, not locked up before we had to even take this measure to provide a regulatory framework?

[Rob Moore, Conservative, Fundy Royal, NB]

Mr. Speaker, section 347 of the Criminal Code, which prohibits interest of over 60%, was originally brought forward to address the type of loansharking the hon. member has referenced, the serious cases that we perhaps have seen in the movies. People do not imagine, in many cases, the thousands and, indeed, millions of transactions that take place in Canada with some of the payday lending institutions.

As I mentioned, the payday lending branch is a relatively new phenomenon in Canada. It has developed since those provisions in the Criminal Code were made to combat loansharking.

We feel that section 347, while appropriate to deal with loansharking, those type of serious underworld activities, as the member references, is not the best tool to regulate the payday lending industry as it has developed. We feel the group in the best position to regulate this industry is the provinces. We have talked a bit about Manitoba. I mentioned Nova Scotia. We talked about Quebec.

It could be that each province will take a somewhat different approach to regulate payday lending within its jurisdiction. We recognize the different approaches that provinces wish to take. By passing Bill C-26, at their request, we are enabling them to take that approach. It should be mentioned that if a province chooses not to move in this direction and regulate that area of law, then section 347 of the Criminal Code continues to apply to all transactions.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Mr. Speaker, I believe if you would seek it, you would find unanimous consent for me to split my time with the member for Malpeque.

[The Deputy Speaker, Bill Blaikie]

Is there unanimous consent?

[Some hon. members]

Agreed.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Mr. Speaker, I rise today to speak in favour of the legislation before us, Bill C-26, An Act to amend the Criminal Code (criminal interest rate).

The legislation seeks to amend section 347 of the Criminal Code of Canada, which criminalized the charging of usurious interest rates. Section 347 limits interest charges on loans to 60% per annum.

When it was enacted, section 347 contemplated larger long term loans. As such, this section of the Criminal Code requires the interest on a loan to be calculated annually, even if the loan is for a short term, such as only five days. Therefore, the interest is calculated by compounding daily over 365 days, even if the loan is only held for a few days. One hundred dollars lent for five days at a cost of $1 therefore amounts to 107% annual interest. This would be the equivalent of requiring hotels to post their annual room rates at $55,000 per year, rather than $150 per night. Similarly, this would be the same as requiring a car rental agency to post its rates at $13,000 a year rather than $35 per day. We use many such short terms devices in our daily lives and we calculate the services using short term pricing, not annual rate, a meal in a restaurant or a tax trip across town.

Payday loans are also a short term product, so annualized rates are the wrong measure of the products cost.

What is a payday loan? This is defined as an advancement of money in exchange for a post-dated cheque, a pre-authorized debit or a future payment of a similar nature, but not for any guarantee suretyship, overdraft protection or security on property and not through a margin loan, pawnbroking, line of credit or a credit card.

In order to qualify for a payday loan, the borrower generally must have identification, a personal chequing account and a pay stub or other proof of a regular income. Payday lenders typically extend credit based on a percentage of the borrowers net pay until his or her next payday. The borrower provides the lender with a post-dated cheque or authorized direct withdrawal for the value of the loan, plus any interest or fees charged.

Who uses payday loans? In early 2005 the Consumer Agency of Canada placed questions on the Canadian Ipsos Reid Express, a national omnibus poll of Canadian adults, about Canadians experiences with and motivations for using cheque cashing and payday loan services. The survey found that approximately 7% of survey respondents had used a cheque cashing or payday loan company. Cheque cashing was the most frequently used service at 57%, followed by payday loans at 25% and tax refund anticipation loans at 5%.

Certain respondents were more likely to have used these services, including men, those between the ages of 18 and 34, urban residents, residents of British Columbia, Alberta, Saskatchewan and Manitoba, those with household incomes less than $30,000 and those with some post-secondary education. Some of the reasons cited included that it was faster, it was more efficient and they needed the money more immediately, that the hours were more convenient, that they were open later than other financial institutions and that they had previous credit card problems, no credit card or no chequing account.

Although I personally never needed to use a payday loan, I can imagine how the service could be very helpful. There are so many scenarios that would require such instantaneous access to cash such as car repairs on a long distance trip, provision of a rental deposit to secure that just right apartment, a sudden illness or death of a family member that requires an unexpected trip to another province.

For those who are living through the challenge of a previous bankruptcy, life is a cash only society, with no access to credit cards to help bridge the wait between paydays. Clearly, payday loans are a required services for many Canadians, but they need to be regulated to ensure that consumers are protected.

The Canadian Payday Loan Association indicates that the payday loan industry first emerged in Canada in the mid-1990s. As of 2004 there were nearly 1,200 outlets, and as the parliamentary secretary advised, there are more than 1,300 right now. In my riding of Thunder Bay--Rainy River, I have recently witnessed the opening of nearly half a dozen payday loan businesses where just 10 years ago there were virtually none.

Why are amendments needed?

As stated earlier, section 347 makes it a criminal offence to charge more than 60% per annum. Section 347 was initially introduced to combat the practice of loan sharking and its links to organized crime. It was not intended to be a consumer protection tool for economic price regulations.

If the rate of interest on a payday loan transaction is calculated according to the definitions and methods specified in the Criminal Code, some payday loan companies appear to be charging in excess of 1,200% per annum. However, it is clear that interest rates on such short term loans should not be calculated the same as those on long term loans. It is also clear at the same time that there is increased demand for payday loan services.

The problem arises because of shared federal-provincial jurisdiction. Financial institutions are regulated either federally or provincially and territorially, depending upon which order of government incorporated them. The federal government has jurisdiction over interest rates, but the day to day regulation and licensing of payday lenders most likely falls under provincial jurisdiction as part of the provinces' power over property and civil rights.

Because of this confusion in jurisdiction, payday lenders have been left essentially unregulated. Provinces are unable to regulate the price of a loan, since any attempt to do so would conflict with section 347 and could therefore be challenged. However, section 347 has not been used in a criminal context to curtail the activities of payday lenders because the consent of a provincial attorney general is required to prosecute an offence.

Provincial governments are wary to prosecute a payday lender for fear that the lack of a payday loan company alternative would result in consumers using illegal alternatives such as loan sharks. The payday lending sector is one of the only segments of Canada's financial services sector that remains unregulated.

All other countries that have experienced rapid growth in the industry, including the United Kingdom, Australia and the United States, have rules in place to protect consumers. The United States, for example, has 22,000 retail store outlets. Forty states have put in place consumer protection rules. To date, no fewer than five provinces have openly called upon the federal government to change section 347 so that they can move ahead with provincial regulation of the industry.

If the payday loan industry is not regulated, its future may ultimately be determined by a number of class action lawsuits that are currently proceeding through Canadian courts. These lawsuits claim that consumers were charged fees in excess of the Criminal Code rate and seek to recover hundreds of millions of dollars worth of interest. Should these class action lawsuits succeed, they could potentially bankrupt the payday loan industry.

There have been significant federal-provincial-territorial consultations regarding regulation of the payday loan industry. Through this consultative process, they have all agreed that section 347 is an inappropriate control for payday loans and that it should be amended to enable provincial regulation of the industry.

In October 2005 the Liberal federal minister of justice acknowledged that section 347 does not make sense and should not apply to payday loan companies. The minister sought and obtained cabinet approval to amend section 347 accordingly.

I am very pleased to see that that Conservative government has chosen to follow through with the introduction of this legislation, which was developed through the hard work of the former Liberal ministers of justice and industry. The dropping of the writ and subsequent election are its own story.

What has been changed with Bill C-26?

The bill adds a definition of payday loan. This is an important addition because it provides a clear definition of a second kind of loan where previously there was no differentiation and all loans were treated equally.

Clause 2 introduces new subsection 347.1(2) which exempts a person who makes a payday loan from criminal prosecution, if the loan is for $1,500 or less and the term of the agreement--

[The Deputy Speaker, Bill Blaikie]

Order. Questions and comments, the hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, my riding is another one with a very long name that describes the whole of the area where the people I represent in this House make their homes.

I listened with interest to the remarks of my colleague. I know that the work has been done by the Standing Committee on Industry and not the Standing Committee on Justice. Perhaps he is not aware of how these things were done, but I would still like to ask him a question.

In Quebec, as opposed to what has happened in the rest of Canada, the matter of payday loans was dealt with in the 1990s—if not, indeed, the 1980s—with the creation of the Office de la protection du consommateur. In Quebec, the maximum rate of interest that can be charged is 35%. When this bill was tabled, we expected, therefore, that the federal government would say that any provinces that already has similar legislation, with adequate protection, has only to declare that and it will be automatically designated. That would have made it possible to adopt the bill very quickly in one day of parliamentary debate. However, in committee we encountered fierce opposition—not just mild opposition—from representatives of the other three parties because they absolutely insist that the federal government must have the right to give its blessing to the provincial legislation.

I would like to ask my colleague, instead of demanding that there be a designation made by the governor in council, and in the final analysis, the Prime Minister, would it not have been more reasonable to decide whether Quebec's act is acceptable on the basis of the provisions in Bill C-26?

Would it not have been possible to accept an amendment that was suggested not only by the separatists in Bloc Québécois but also by the Government of Quebec, which represents all Quebeckers and which has administered the current act for 25 years?

Could the Conservatives not have shown that much flexibility when they are so fond of proclaiming that they respect provincial jurisdiction? In this case, they show no sign of that respect.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Mr. Speaker, there has been widespread media attention to this. Some of the provinces, such as New Brunswick, state that they welcome the news about the introduction of legislation at the federal level. Others say handing the regulation of payday loans over to the provinces is the best thing the federal government could do to fix the situation that has allowed financially troubled consumers to be victimized by predatory lenders.

When the hon. member makes his case, he does it very logically and fairly. I hope that hon. members of the House would consider that.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I am pleased to speak to Bill C-26, an act to amend the Criminal Code (criminal interest rate).

The bill was reported back to the House from committee on December 13. It very seldom happens that a bill is reported back without amendments. That shows what can happen when there is strong cooperation between the parties. Actually this is one of six bills the official opposition has called upon the government to work with all parties to pass as soon as possible.

We believe with just a little more cooperation, especially from the government, that in addition to Bill C-26, the following bills could be reported back to the House: Bill C-9, which would restrict the use of conditional sentences; Bill C-18, which would strengthen the DNA data bank; Bill C-19, which would amend the Criminal Code on street racing; Bill C-23, which would amend the Criminal Code and criminal procedure in languages of the accused and sentencing, in other words, update Canada's Criminal Code; and Bill C-22, which would amend the Criminal Code with respect to age of protection, with the importance of protecting children. We believe with a little more cooperation from the government, we could in fact be getting those six bills approved in the House.

In summary, Bill C-26 amends the Criminal Code of Canada to exempt payday lenders who operate in provinces and territories having measures in place to protect borrowers from the application of section 347 of the Criminal Code of Canada, and require jurisdictions that regulate the industry to place limits on the cost to consumers of payday borrowing.

To a great extent a lot of work was done on this bill by previous ministers of industry and justice. A lot of work has gone on with the provinces and territories to get the kind of collaboration needed to put forward this bill in the House of Commons. I congratulate all the folks, including members of the government, who were involved in those discussions to get us where we are at today.

There is certainly a need to ensure consumers that usury interest rates are not allowed in this country. There is no question that there is a lot of authority in the Criminal Code of Canada under section 347 to lay criminal charges for usurious interest rates. Section 347 makes it a criminal offence to charge more than 60% per annum.

As we all know, some payday loan companies have charged far in excess of that rate. In fact, we have heard of outrageous interest charges, when compounded and fees are added, in excess of 1,200% per annum, yet no charges under section 347 to payday loan companies have been made.

Yes, the concern is there, but the payday loan business is a little more complicated jurisdictionally, and I would say on an individual need basis, more than meets the eye. Jurisdictionally payday loan operations are considered to be commercial businesses. They are not banks, although I think many people believe they are. As commercial businesses, to a great extent they fall under provincial jurisdiction.

My colleague, the MP for Scarborough—Rouge River, explained it. I want to quote from his remarks in the House because he gave best explanation on this point:

We are going to keep a Criminal Code provision, but we are going to allow an exemption for a lawful business that lends money using this payday loan mechanism. The exemption will be based on the premise that a province or a territory is regulating the commercial operation.

He went on to say:

Placing this amendment with section 347, will allow the provinces to assume their proper jurisdiction in the regulation of the commercial affairs of their citizens. However, at the same time, we maintain the criminal prohibition with the 60% per annum cap where there is no provincial regulation. We are assuming that a province will provide a form of regulation that will essentially keep the same level of protection the consumers have had up to now.

It is important to mention that because it explains the jurisdictional problem and the difference between the commercialization as a business.

Therefore, the bill does cover off the jurisdictional question under clause 2 by the person being licensed by the province to enter into the agreement, and second, the province has been designated by the governor in council or cabinet under the proposed new section 347.1.3.

On an individual need basis, it is obvious from the demand for transactions, estimated to be $1.3 billion or more, and in fact the parliamentary secretary said it is as high as $2 billion now, and also the increase of payday loan companies that are estimated to be over 1,300. It is obvious from these shocking figures that individual Canadians have an urgent need for short term cash for whatever reason.

Yes, I recognize the amounts are in the low hundreds of dollars, but the cost, as others have said before me, are very high.

Mr. Jenkin with the Department of Industry, who was a witness before committee, indicated:

It's a form of short-term lending through which the consumer typically borrows several hundred dollars for 10 days to two weeks. The borrowing costs are very high, as you probably know. They are usually in the range of, for example, $40 to $75 for a $300 loan for two weeks or less.

I must emphasize that while I support the bill as a way to improve the situation for people who are in need of immediate cash, I still am worried about the impact of the financial strain on individuals. There is no question in my mind that the individuals who are basically forced to use these services are the ones who can least afford to pay these high fees. Maybe they need the dollars to provide food, buy groceries for the family. Maybe they need the dollars for a medical bill or maybe they even need the dollars to pay the minimum payment on a high interest bearing credit card.

Whatever the reason, there is clearly a problem out there that needs to be addressed beyond this bill. I certainly would advise the government and others that we really need to be doing as a country, both at the provincial and federal level, some research into the social or economic reason why people think they are forced to go to these services for those kinds of money. They are the people who can least afford it and I believe that needs to be looks into and addressed.

The bottom line is that we are in favour of this bill. We do believe it is a step in the right direction However, there are other underlying causes that we need to recognize are out there in a social and economic sense and issues that really affect people in their daily lives that forces them to use these services. That is the worrisome point.

The bill is good but I believe the House and the government need to look at the underlying causes of the need to use these services more so.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I was very interested in what my colleague said in his speech, particularly in the fact that he said there will have to be further complementary studies not only to address the disciplinary aspect of this issue, but also to identify the causes and implement the most appropriate measures.

That is why I would invite him—as well as provincial government representatives—to learn more from the Government of Quebec about the current practice that the Office de la protection du consommateur has overseen for almost 20 years, a practice that limits payday loan interest rates to about 35% in Quebec and that has helped curb development in the payday loan sector. This may also be due in part to the fact that the Desjardins group has a particular interest as a lender, as a cooperative lending institution, in ensuring that its members receive the best possible service. In any case, these measures have worked together to prevent the problem from emerging in Quebec as it has done in the rest of Canada.

In light of this visit, this experience, this exchange, the federal government should recognize that Quebec has developed this approach within its jurisdiction. Furthermore, it should simply make note of the results and accept that there is already legislation in place in Quebec. A letter from Quebec's minister of Justice to the federal Minister of Justice explaining that Quebec has a law that meets this goal and that, as such, he considers the requirement fulfilled should suffice. There should be no need to subject a province to an assessment in an area that is already under its jurisdiction.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I do not think there is any concrete evidence to prove the point that the job is being handled well in Quebec. We know they are not being used as much in Quebec but we do not know the underlying reasons for that. It would require a lot more research than the typical Bloc Québécois approach, which is that it is basically due to the issues as they exist in that province. Some national research needs to be done in that area and that can be done with this bill in place. With some provincial jurisdictions operating a little differently than others, there would be the foundation to do that research in the future to get concrete results.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I wonder if my colleague from Malpeque would agree that the reason these payday loan outfits have popped up like mushrooms in virtually every town and community in the country is that the banks have abandoned many places. We have had 15 branch closures just in my riding of Winnipeg Centre in the last five years. In their place, these payday loan ripoff outfits, and I do not hesitate to call them that, have popped up to provide for the basic needs of people who might need financial services.

Would he not agree that while we are trying to regulate and rein in these payday loan outfits, we should also be reminding the banks of their obligations under their charters to provide basic services for Canadians? For instance, under the Bank Act the banks must allow somebody to open a bank account even if that person has no money. Maybe these people would not need to go to a payday loan outfit if the bank had a branch somewhere within miles of where these people live and allow people to open a bank account so they can cash their cheques without paying 3% or 5%. Would he not agree that we need to get after the big banks to live up to their obligations at the same time as we are trying to rein in these ripoff payday loan outfits?

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, it is not only in downtown Winnipeg where banks have withdrawn services and centralized their banking operations. I have had the opportunity to travel a lot in rural Canada and I have seen a lot of that happening there as well.

I actually think it could be a factor because people do need to go somewhere to cash their cheques. At one time banks were a very important part of many rural communities. They have withdrawn their services at a time when we see their profits going through the roof. They not only charge high enough interest rates but their fees are absolutely ridiculous. I do not think many Canadians recognize how much the fees stacked on top of fees have escalated within the banking sector.

I see the parliamentary secretary to the Minister of Agriculture and Agri-Food over there. If the government continues it moves on the Canadian Wheat Board, we may see farmers themselves using payday loans. The government is withdrawing dollars right out of farmers' pockets with its attack on and undermining of the Canadian Wheat Board.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, today I rise to speak to Bill C-26. After examining this bill in the parliamentary committee, I thought that it would be very favourably received since the Government of Quebec has had legislation for the last two decades that manages the payday loans issue through the Office de la protection du consommateur.

Quebeckers who are listening to the debate today must be wondering why this question has still not been resolved. They must be asking themselves, "Is there not legislation under which this issue could be dealt with?" The answer is no. In the rest of Canada, that is not the case.

I saw this in committee. The representatives of the three federalist parties joined together and systematically, and very firmly, opposed a slight amendment being made to provide that in the event that a province—such as Quebec—already had a law that addressed this issue adequately, no in-depth study would be done. The jurisdiction of the province would be respected. The provincial authorities have decided that this is the right approach. At that point, notice would simply be taken that the law and the mechanics were already in place. That is the law that would prevail.

The payday loans question is important because it often affects people with very low incomes or people who suddenly need financial loans. In the rest of Canada, a flourishing industry has developed that engages in all sorts of conduct. Some work according to all the rules, others less so. I perfectly understand that there would be a desire to deal with this issue. The Bloc has never objected to this kind of legislation being applied in the provinces where there is not already legislation in this area and where the provinces decide to apply it.

Our opposition to the bill arises out of the fact that there is already a law in Quebec. My colleague said earlier that he had a problem with the Bloc's approach and that he needed proof. This is not the Bloc's approach; it is Quebec's approach.

The present federalist liberal government in Quebec City is of the same view as the Bloc on this point. We have checked with the office of the minister. The office of the minister wanted Quebec to be able to say, by giving notice to the federal government, “We already have legislation that deals with the question of payday loans, and accordingly it is that legislation that will apply in Quebec.”

In actual fact, though, this is not the answer we received. The provincial government will have to submit its legislation to the federal government. There will be studies of the appropriateness of the bill and how we are dealing with this problem. Then it will be referred to the Governor in Council. It is quite a production.

Although this is a provincial jurisdiction, that is to say, an area that is Quebec’s responsibility, and although Quebec has had 20 years of experience and there are no problems with the application of the law, we still have to go and seek the blessing of our big brother in Ottawa.

It is totally incomprehensible that a Conservative government like this one, which claimed that it would show more respect for areas of provincial jurisdiction, would act in this way. There is even talk of a bill to provide a framework for the federal government’s spending power.

They say that Quebec is a nation. The Prime Minister himself introduced a motion in the House to this effect. But at the first opportunity, when they finally have a chance to show they are going to do things differently, the bulldozer is there ready to go. The steamroller is right there. They are going to standardize everything all across Canada.

The provinces will all be required to justify their legislation. Even 20 years of experience in this area does not matter. According to the federal government, that is not how these issues can be resolved.

It is important to know that under the practices developed in Quebec over the years, the maximum currently acceptable rate is 35%. That is very different from what is seen in the rest of Canada. Thanks to the Office de la protection du consommateur, the various roles are well defined and understood. We do not have any problems with this industry. To the extent that it exists, particular practices have been accepted and excesses are prohibited. Quebeckers are legally entitled to a maximum rate of about 35%.

People who want to make a pile of money in a hurry on the backs of those who are not very well off financially by providing these kinds of services have less incentive to try to do so.

The Criminal Code refers to a rate of 60%. Now, the government wants each province to pass legislation in this area if it sees fit, whereas Quebec has already done so.

The bill states that the federal government will designate provinces. It is therefore giving itself the right to veto the measures taken by a province that requests an exemption. A province cannot just send a letter to say that it already has legislation in place. A province that has legislation like what Quebec has had for 20 years must come, hat in hand, and ask for an exemption from a government that has been unable to solve this problem for 25 years. It is like saying, “We have a law. Will you let us enforce it?” This is typical of the federal government, especially senior bureaucrats, who want to have “One Canada, One Nation“ here in Ottawa.

The reality is quite a different matter. Obviously, jurisdictional legislation will not change the world, but this is an example of a situation where, in a year when the federal government recognized Quebec as a nation, it is also telling Quebec: “You are a nation, but when it comes to payday loans, we do not recognize what you are doing and we want the right to give our OK”. This is the federal government's double standard.

In its policy statements and in its day-to-day behaviour, the government is taking the old approach that Quebeckers have often criticized. We hope that payday loans can continue to be dealt with the way they have been by the Government of Quebec and that the federal government will end up giving its blessing very quickly. The fact remains that this is written in law. This is something that is inconsistent with sharing jurisdictions and does not respect the expertise developed over the years.

There is no doubt that in the rest of Canada it is important to have a way to deal with this situation. We know this by the letters received from people who tell us about what is going on in the rest of Canada. There truly are behaviours that need to be brought into line. There needs to be a framework. Quebec has had this framework for 20 years now. If the provinces want to see how it works, they can contact the Government of Quebec to see the method that was developed. If they want to use it, all the better. If they decide to do something else, that is their choice. There is no problem. We will respect their jurisdictions.

The position the Bloc Québécois is defending today is not one of “sovereignists”, it is the position of the Government of Quebec, the current federalist government and the previous governments of Quebec. It is governments and people who have witnessed the role of the Office de la protection du consommateur. These are people who represented very different opinions on a national level, people such as Ms. Bacon, who is in the other place, and Ms. Payette, who was a Quebec minister for the Parti Québécois. She brought about some significant changes in our society and continues to do so today through her writings. These were people with very different opinions, but they had a frame of reference at the Office de la protection du consommateur, which is an example and a very interesting model. Today, Quebec is getting a rather discouraging message from the federal government.

I was even more surprised by the attitude in committee. Tomorrow in the Committee on Industry, a report will be tabled on the manufacturing sector and, without revealing the content of the report, it will be quite unequivocal about the action that should be taken in this sector.

Now, when a question of jurisdiction arises and a tiny change is needed in our legislation to ensure that Quebec's areas of jurisdiction are being respected, the three federalist parties rise to say: “No, we cannot spend time on a small amendment. There is no satisfying Quebec on this. Quebec must conform to the same requirements as the others”. This is an example of what we have seen in the past, and there are many such examples. We did not think we would see it again here today in a bill such as the one now before us.

With respect to the payday loan industry, we are told that it arose in Canada mainly in the early 1990s. I believe the Office de la protection du consommateur was already regulating the loan sector to some extent. This is likely why Quebec did not experience any serious abuses in this industry.

Jurisdiction is shared to a certain degree, since Quebec and the provinces have responsibility for local trade and commerce and civil law. There is also shared jurisdiction over contracts and consumer protection.

The federal government estimates that this industry now comprises more than 1,300 points of sale. Their distribution is very uneven and Quebec has very few such businesses. In practice, anyone in Quebec who is listening to this debate likely believes that this issue has already been resolved and must be wondering why a new bill has been introduced on this topic. I would like to explain to them that the industry grew at very different rates in Quebec and in Canada.

Little is heard about this issue in Quebec, because it has been resolved for several years now, in fact, for decades. The new situation in the rest of Canada must be corrected. We agree with the substance of this bill. However, when it comes to respecting jurisdictions, the bill does not in any way meet Quebec's requirements.

When I was working in committee on this issue, thanks to the marvels of modern communication technology, I received notices from the Government of Quebec, calling for a debate to pass the proposed amendment.

Meanwhile, members of the various parties said that it was not an important issue. The deputy minister of the department, the senior public servant, had just told us that this would not have any implications for Quebec and that it was wrong to believe that federal approval would be required. Just then, I received a cabinet memo from the Quebec Minister of Justice on my Blackberry stating the exact opposite.

Such a striking example shows us that there are still too many things to be changed in this system for there to be true respect. If there is no respect for our jurisdiction in matters such as this one, which is very important, imagine what will happen with even more significant issues.

Individuals are forced to borrow money against their wages and have to deal with people who charge ridiculous rates. There must be oversight in this area.

On this matter I agree with my Liberal colleague from Prince Edward Island who spoke earlier. We must also examine the overall implications and what must be done. It is not true that the issue will be resolved by a mere rap on the knuckles of those who do wrong. An enforcement component must be put in place. However, there is also the question of the environment in which people work, as well as what is required of banking institutions.

My NDP colleague was saying that the banks have not done their job. I think there is some truth to that. In Quebec, we have the Desjardins movement. In recent years, profitability has been a major consideration, but it has nonetheless developed a means of helping individuals who are having a little more difficulty. This has prevented an unhealthy industry from emerging.

In my riding, credit unions have a special committee that looks at such issues when it is urgent. This has led to a more humane approach to these situations. This is what will have to be put in place by the provinces that need to develop legislation. With the bill before us, they will require federal government approval when they table their legislation. Perhaps this does not bother the other provinces and they agree with this way of doing things.

The government should have respected the fact that each province moves at its own pace. If the government truly respected jurisdiction in this matter, this bill would have contained an amendment making it possible for us to adopt it immediately. I sent amendments to each member of the committee. Making them would have indicated a change in attitude on the government's part toward recognizing Quebec's expertise in this matter, which is not currently the case. At the same time, the legislation would have been adopted faster so that the situation could be addressed appropriately in all Canadian provinces.

In light of these factors, I believe you will understand why the Bloc Québécois cannot vote for this bill in its current form: it does not respect Quebec's jurisdiction. There is still time for the federal government to amend the bill. We can easily reach a compromise. I would ask the government to check its source within the Quebec government because that government's position on this issue is the same as the Bloc Québécois'. The bill would be much more acceptable if it were amended to take into account Quebec's expertise and to respect its jurisdiction. It that were to happen, we would have the opportunity to adopt a functional bill as soon as possible, one that respects provincial jurisdiction and Quebec's jurisdiction in this matter and that recognizes the expertise we have developed.

Today, a quick look at every province reveals that there is one province where payday lending is not a problem: Quebec. The other provinces have a serious problem. That is clear from the members' eagerness to pass this bill even if it means encroaching on Quebec's jurisdiction in committee.

Today's debate in this House will make the public aware of this situation. Quebec is being treated like a child with respect to this practice. Quebec has the expertise, the jurisdiction and the power to implement its legislation, but the federal government is imposing its own way of dealing with the payday loan issue.

I hope that the members of this House will pay attention to what we are saying. I will be available to answer any questions and address any comments from colleagues who are not members of the committee but who would like to have a say in this matter.

The House resumed consideration of the motion that Bill C-26, An Act to amend the Criminal Code (criminal interest rate), be read the third time and passed.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, this is a day to celebrate. We have reached the end of a long hard process to get some justice in the area of fringe financial services. Today, we are debating the final stage of a bill that will bring us closer to moment when payday lenders are regulated across the country.

Getting here was no easy feat, but it happened after a great deal of work on the part of members of the House. It happened after enormous pressure from community groups across the country. It happened because we found a way to cooperate when push came to shove. I think that tells Canadians everything they need to know on how to make Parliament work, especially in a minority situation.

Here we are today with Bill C-26, at its final stage, that will give provinces a mechanism, a means by which they can regulate payday lenders without leaving it up to a system that has largely failed Canadians over the last decade or more.

With the bill, we have an ability to set aside the Criminal Code pertaining to what is an acceptable rate of interest, that being 60%, so provinces can put in place a regulatory framework to put an end to usurious rates and to lending practices that take advantage of the most vulnerable in our society.

This has come after considerable debate in the House and at the industry committee. General approval and support for the idea has come from all sides, except for the Bloc. Most of us are still trying to figure out the position of the Bloc on this important issue. We know the province of Quebec has a system that works, a system that deals with this matter on the basis of consumer protection. Members of the Bloc feel that the province of Quebec has dealt with the problem of those who prey on individuals through payday lending operations.

Therefore, the question for the House has to be this. Why can we not simply agree among ourselves to get this passed so that all provinces can have some way to protect consumers in the most expeditious way possible? To this day, we are still trying to understand why the Bloc chose to use some methods at committee and in the House to hold up the bill when, at the outset, there was almost unanimous support to have the bill, which is a one paragraph, proceed through all stages as quickly as possible so provinces, waiting with legislation, could do so.

In terms of the Quebec situation, we cannot figure out the reasons for the obstruction from the Bloc members, especially in the context of the Quebec media. Just in the last week or so, when my leader and our caucus spoke out vehemently against the use by banks of what we would consider exorbitant fees at ATM machines, the Quebec media responded and said that it was a silly issue. Le Droit suggested that there were things far worse than ATMs. I will read from Le Droit of January 30 of this year. It says:

Come to think of it, there are things worse than the fees charged for using ATMs...

The article goes on to say:

If he had really wanted to do something for the poor in Canada, the member for Toronto—Danforth would have targeted the some 1,300 financial service outlets such as Money Mart—the payday lenders—that lend small amounts of money to some two million Canadians annually, at such high rates that they are currently being sued in a class action in Ontario.

We have taken both issues very seriously. Obviously we feel there is a real need, and Canadians agree, to put some limits on the fees that banks can charge for accessing one's own money. We have spoken out about the exorbitant fees that Canadians are charged and we have asked the government to consider putting a lid on those charges or, in fact, to eliminate the charges we face to access our own money.

At the same, we have been fighting for years on the question of money marts, rent to owns, payday lenders and all fringe financial institutions. This has been a driving force of members in my caucus over the last four or five years.

I can go back to when we first started raising this years ago. We put forward motion after motion, asking the government to start to take action against payday lenders and those who preyed on people when they were most vulnerable. We worked long and hard to try to get the former government to recognize the need to take action.

I wrote to then minister of finance, now the House leader for the Liberal Party, to ask him to do what Manitoba and other provinces wanted, which was to have provisions to set aside the Criminal Code so provinces could finally take action to put a lid on these usurious fees and to try to deal with the vulnerabilities that people faced as a result of this explosion of alternative financial centres or alternative fringe financial centres in the absence of bank presence. We did not get very far with the previous government.

When the new government came in, we began the process all over again. It took a considerable period of time, but we finally are at the point where we have cooperated, one another in the House. We have developed legislation that would allow the job to be done. Is that not what matters? In the end it is not the politics and the games about how one can hold up the House for other purposes and who initiated what and how it came to be. It is about trying to get something done for Canadians.

This is an example of where the House is making a very significant initiative on the part of Canadians, many of whom are forced to deal with payday lenders and other fringe financial services.

I do not need to go over the statistics, we have had many of these during these debates. We know that just in a decade we have gone from zero payday lenders to over 1,300. We know the stories of people who have lost their life savings. They were in this vicious cycle of going to payday lenders, being taken advantage of and being trapped for the rest of their lives. Story after story portrays this tangled web of payday loans.

I will read one example that came from a number of years ago, back in 2004. It was reported by the Toronto Star. The article begins by saying, “Quick cash, creeping risk 'Pride was what I left behind'”. It says:

Kim Elliott's Friday payday loan ritual that began as soon as her 12-year-old son was off to school.

First stop was the bank to withdraw $700 from the freshly deposited $900 paycheque from her job as a front desk manager at a Windsor hotel.

A short drive away, $650 went to pay off a loan at Stop 'N' Cash, a payday lending store that offers high-interest, short-term loans. As soon as the teller had the cash in her hands, Elliott took out another loan, this time to pay off the interest on a loan at Cash Money, another payday loan store. The transaction was the same there—pay down, loan again, drive to the next lender.

Three hours and three to our loans later, the paycheque was gone. Elliott would then take out about $350 in her final loan of the day, this one to have money to get through the next two weeks.

Does that not say why this day is so important and why Bill C-26 has to be passed as quickly as possible?

It is especially relevant in areas where the banks have abandoned entire communities. Whether one is looking at the question of ATMs or the issue of money marts and payday lenders, the root of the problem is the same: big banks have abandoned communities.

For the purpose of the House's understanding of the issue, I will once again describe what happened in Winnipeg North, my constituency. In the old Winnipeg north end, over a period of half a dozen years, all bank branches closed their doors and left that entire community without access to bank branches.

Yes, there are outlying branches, but we are talking about a community that has a high proportion of senior citizens, a very high level of low income earners, many people with disabilities, people who do not have access to cars or family members to drive them or access to computers and sometimes even telephones to do their banking. What do they do? In the case of trying to get cash, they have to go to a private white label ATM machine and they get charged up to $6 to access maybe $20 or $30, whatever they can afford to take out of their accounts.

People in organizations, like the Bankers Association, and perhaps even some members in this place have suggested that the NDP is ridiculous for raising the question of ATMs and fees. When there is a situation like that, we are not talking about convenience. We are not talking about affluent people who should know better in terms of how much money they take out at one time. We are talking about people who do not have any other choice.

The same holds true when it comes to fringe financial services. The same holds true when it comes to payday lenders. When the banks left, they created prime conditions for money marts, rent to owns and payday lenders. Every aspect of the fringe financial service popped up. It took up the space and filled the vacuum.

People went to those places because they did not have any other choice. There was no place to do their banking. There was no place to access some short term cash without going to a place that charged exorbitant interest rates and all kinds of fees and additional arrangements on top of the 60% interest rate that is criminal.

Something had to be done. We needed a way to get this into the hands of consumer protection departments at the provincial level so regulatory schemes could be put in place to arrive at what would be a reasonable interest rate for these kinds of lending situations. That is exactly what this legislation aims to do and what provinces like Manitoba, which has been the pioneer in this field, aim to do. It is about putting in place a mechanism so one can assess what makes sense in terms of an interest rate.

No one is saying that we cannot look at this in terms of risk and not charge interest. We are talking about short term loans where there is some risk, so there has to be an interest rate structure that is reasonable and allows for people not to lose the shirts off their backs.

However, in that context, why should we allow people to charge a 1000% or $2000% interest rate? Is there not a limit? Is there not something government can do? Is this not the best way to do it, given the fact that we could not over the last number of years get the provinces to agree on one standard? We could not get the federal government to pull those ministers from the provincial and territorial governments together to arrive at one standard. It dragged on for too long, to the point where the provincial NDP government in Manitoba finally brought in legislation of its own that then began this ripple effect where other provinces followed suit.

As we speak today, the Manitoba NDP government and the New Brunswick government have legislation ready to go the minute Bill C-26 is receives royal assent. They are waiting desperately for immediate action by the House. I hope we can get there very quickly, finish this debate, have the vote, get it to the Senate and get it back here, with royal assent.

In the face of banks leaving communities like Winnipeg North, the community had to take charge of the situation. People in Manitoba and in my own community of Winnipeg North finally said that they had been hurt by the banks too many times. They could not seem to hold the banks to account. They could not make the banks come to them with their statements before they shut the doors. They could not seem to convince the banks that there was some merit in having access to personalized banking services in every community across the country.

After 10 bank closures and after trying everything possible, people in the community basically said that they were going to take matters into their own hands and work with the folks who really care about the community to make a difference. That is what happened. It was not necessarily with great help from government, although there was some financial support of course. It was not with the help of any of the banks, although the last bank to close its doors in Winnipeg did give some money for a pilot project to study an alternative financial community services arrangement. That bank did give its building to the community for $1. That has made a difference and we thank the CIBC for that, but the CIBC left a whole community. It abandoned a whole area. Small businesses, local community activists, organizations, many seniors and hard-working families were suddenly left without anything. I think the CIBC actually owed it to the community to do that.

I hope other banks who abandon us will look at that as an example of their responsibilities. I hope they will consider doing so before we have to go to the next step which is to try to bring in what is so workable in the United States, a community reinvestment act which forces banks to carry out their responsibilities to the community and to give something back for the loyalty of consumers over those years. Rather than go that route, I hope banks will start to realize that they have a responsibility to Canadians, to the consumers and clients who built up those banks over the years and made such huge profits for them that the banks owe something to those communities.

Today we have a chance to make up for the downfall, for the failings of a banking system that has ignored consumer concerns. Today we have an opportunity to protect consumers from exorbitant interest rates. Today we have a chance to say to communities that we believe that a community needs to have a say in its own destiny.

The whole origin of the project in Bill C-26 came not from government, although the Manitoba NDP government was vital and central to the whole evolution of this wonderful legislation, but it came from the community. It came from organizations that felt the impact of the banks abandoning them. It came from community activists and research groups who well documented every step of the way what was happening to our community. It is only right that we pay tribute to those studies which documented this problem.

I refer to the work of Jerry Buckland, who is with the Winnipeg Inner-City Research Alliance, and to Nancy Barbour, who came out of the community and worked on this research, who has since passed away, and to whom we owe a great debt of gratitude. They did the study, “The Rise of Fringe Financial Services in Winnipeg's North End”. They put together detailed studies on fringe banking in Winnipeg's North End. Going back to September 2005 there is the paper, “There Are No Banks Here” regarding financial and insurance exclusion in Winnipeg's north end.

The situation in Winnipeg's north end is not peculiar. Many older neighbourhoods, inner city communities and rural communities have gone through the same phenomenon where banks have abandoned the communities and gone to where they say it is more profitable. The banks have left people at the whim of payday lenders and to pay exorbitant fees at ATM machines.

Today we are taking a step to correct this. Today we are actually making a difference in terms of the lives of Canadians. I urge all members of Parliament from all sides and all walks of life to support this bill. Let us get it through the House as quickly as possible so that it can receive royal assent. Let us put into place legislation that makes a real difference for ordinary families.

[Yvon Lévesque, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Mr. Speaker, with all due respect to the hon. member for Winnipeg North, I wish to remind her that she is well aware of what is preventing Bloc Québécois members from supporting this bill. It is because the Quebec legislation is far better.

I remind hon. members that it is now my turn to speak and they should listen.

I also want to stress the centralizing attitude of both the New Democratic Party and the Conservative Party of Canada. I understand her decision to belong to a national party that feels compelled to support each province, even though it may be against its voters' best interests. The Bloc Québécois has the advantage of representing only the interests of Quebec.

So, the bill now before us goes against the interests of Quebec.

The hon. member talked about petty politics. She should look at herself, instead of accusing Bloc Québécois members of engaging in partisan rhetoric.

We had a fine example last weekend. Indeed, we saw two government ministers go so low as to betray their voters by signing a contract that deprives Quebec of huge revenues and that is evidence of yielding to Canada. Such is the vision of major national parties. This is why the Bloc Québécois will never support a bill that will downgrade what already exists in Quebec.

Remember during the election campaign, when the Conservatives were going on about being open and respectful. Today, we can only conclude that the Harper government is pursuing the federal objective of infringing on—

[The Acting Speaker, Royal Galipeau]

Order, please. The hon. member for Abitibi—Baie-James—Nunavik—Eeyou knows that other hon. members cannot be referred to by their surnames or given names, just by their title or the name of their riding.

So a word to the wise.

[Yvon Lévesque, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Mr. Speaker, I just referred to the government by the name of its leader, but I meant the Conservative government, if you prefer that view of things.

So it arrogated unto itself the override power in section 347, which has now led to the Bloc Québécois opposing this bill.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, I simply cannot understand the position taken by the Bloc member here in the House of Commons. It is a fact that this bill does not change a thing in the province of Quebec. If Quebec has effective laws for dealing with money mart-type problems, that is well and good. That is very good for Quebeckers. There is a problem, though, in the rest of Canada. It does not have a bill of this kind or a way of protecting the victims of payday lenders and money marts.

This bill is therefore an opportunity for all us to make a difference everywhere in Canada. This is not a jurisdictional problem. Nothing in this bill affects the ability of the Bloc members or the PQ or anyone else in Quebec to determine their future. This is really a bill that addresses the problems of people who have been victimized by money marts and payday lenders. That is all.

Why does the Bloc want to turn every bill into a jurisdictional debate, even when that is not the case?

Our support for this bill does not mean that we support the Conservative government in general, but we will work together with anyone in the House to make changes that are important for people everywhere in Canada. That is all.

The Bloc’s position simply does not make sense. I want to go back to the article written by Pierre Jury in Le Droit:

If he had really wanted to do something for poor people in this country—

I imagine that that is what the Bloc members in the House really want. They want to work on solving the problems of poor people. Consequently, as other people in Quebec say, if we are interested in changing the conditions that cause poverty in Canada, we must deal with the financial service operators that victimize people. They are like vultures. They are going to set ultra-high interest rates that push people into poverty.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I listened to the member from the NDP and, as my colleague from the Bloc mentioned, with proposed clause 347 in the bill, the federal government could encroach on Quebec's jurisdiction. It could interfere with what we do. In Quebec, we have the Office de la protection du consommateur and it set the maximum interest rate at 35%.

What I do not understand in the position of my colleague from the NDP is that she compares that kind of loans to loans from automatic teller machines and to other kind of loans and she purports to defend the interests of the poorest in our society. However, the bill talks about interest rates of 60% over two weeks. That means that the person who borrows money could be charged up to 60% interest after two weeks and that would be legal according to the bill. Are you really asking for that? I cannot believe it. How can you say that and still claim that you defend the poorest in our society? Are there no other solutions?

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, I realize that the members from the Bloc do not understand the bill. The member said that we are in favour of the 60% interest rate mentioned in the bill. That is not the case. The situation is quite the opposite. We reject the idea that we should simply talk about a 60%interest rate.

We have said the opposite. We have said it does not work in the rest of Canada. Maybe there is a good system in Quebec, but it does not work in the rest of Canada because all of these payday lenders have managed to put together all kinds of other fees, so that 300%, 400% or 1,000% interest ends up being paid. There is no way around it because of the way this area is regulated.

This is not about kow-towing to the federal government. We are simply saying that we would like the federal government and the provinces, not Quebec because it has its own system, to agree that they will put aside the criminal rate of interest, which is 60%, when a province has a better system to manage this area.

It is as simple as that. That is the way things are. That is all. The issue is not one of restrictions, it is not about the weakness of provinces like Manitoba. The issue is an issue of fairness for all people throughout Canada.

[Charles Hubbard, Liberal, Miramichi, NB]

Mr. Speaker, with your permission and the consent of the House, I would like to share my time with the hon. member for Etobicoke North.

As I listen to the debate between the two parties, and we think of the bill, Bill C-26 is a very small bill. Most of the sections in it deal with the concept that the bill will only be effective in terms of trying to regulate the industry if the provinces request assistance. It is not something that is going to be driven by the federal government, but rather it is in response to concerns that the provinces have had that they are not able to regulate the same day or payday loan activity.

We have to assume that there are people out there who want to borrow money for a short period of time. This morning I was checking with one of those groups and I found that it seemed so simple. If one wants to borrow $500, the indication was that one would pay only 16¢ per day for each $100 borrowed, but there is also a $10 fee in order to register with the company.

It sounds like a very small amount of money to pay back, borrowing $500 for 10 days, but when we consider it in terms of the Criminal Code, that interest rate without the fee would be nearly 60%. I am concerned that if I were working for one of those companies today, listening to the debate in the House, it must be rather a slimy feeling they have about our attitudes about the type of activity that they have in those communities.

They are all pointed out as being terrible organizations and we see them as being people who are trying to rip off the poor. In fact, many of them do rip off the poor. I asked the parliamentary secretary this morning, in terms of the other fees that are associated with payday loans because those loans are often given to people who are very short of money, who do not have friends and who have no opportunity to borrow from a bank or from another financial institution.

I dealt with a case in my own riding on Friday of a person who applied for EI. He had been out of work. It took him a few days to get his record of employment from his employer and then he put his request in to draw his EI. After waiting nearly 30 days, his claim had still not been processed. I am glad to say we found out today that his claim has been processed, but an individual who has been without a paycheque for nearly five weeks is in need of money. He said that he had no money because he had medical needs in terms of prescriptions and on Friday afternoon he was very desperate. I would think that he might be a person who would go to a same day lender to get a short term loan until his first EI cheque arrived.

Other people in the country might be working for an employer and would have to wait two or three weeks to get their paycheques. If they could borrow the $500 and get it at a reasonable rate, then it would be a service that our banks and other financial institutions often do not offer.

We know that the sad cases that we hear of usually deal with other penalties that are associated with the initial loans. We know that the costs that they put in, in terms of administrative fees, in terms of whether or not one is able to pay the loan after the 10 or 14 days are up, cause heavy penalties that are built into the amount of money that has to be paid when the loan is up.

We find, as some speakers have indicated, that in many cases companies that are involved in these franchises are able to rollover those loans, to keep the person in a rut until that loan has become so great that it is almost impossible to pay back.

We are talking today about some form of consumer protection. We are trying to avoid the idea of predatory lenders. We have the old system of pawn shops. We have various other financial agencies that cost 30% to get money from them. We have credit cards which sometimes run as high as 28% and we try to regulate those in terms of our various regulations, policies and laws.

This particular bill, Bill C-26, goes to section 347 of the Criminal Code and with it we are placing those organizations not in terms of the financial arrangements that our country has within our finance but more importantly, within the Criminal Code. We are dealing with it in terms of people who would be assessed very heavy penalties, in fact penalties that would put them in the criminal group.

Why do we have it? We as Liberals want to say that we have this on the fast track. We have indicated to the Minister of Justice that there are six bills that he has before the House that we want to be sure that they proceed quickly.

I felt badly today that in terms of some time that we took after question period we dealt with a very difficult case of justice. Wilbert Coffin was a person from Quebec, a riding in fact just north of my own, and to think that we had to debate that issue and bring it in at the same time as we are bringing in another type of criminal activity which is actually causing people to pay too much interest and to cause them financial hardship.

I want to assure the House that as Liberals we strongly support the bill. We want to see that the provinces have the opportunity to bring in legislation that will enable them to effectively regulate not only the same day loans or the payday loans but hopefully to regulate a lot of those activities within our provinces and within our country that cause so much hardship to the people who are less able to afford it.

Being poor is a terrible thing in this country. I know as a party and as the House we all want to work to see that we can end poverty, but we also know that many people are poor on a weekly basis in terms of having some particular problem which causes them to get a same day loan.

As a party we support this venture. We want to see the bill become law as quickly as possible. I can assure you, Mr. Speaker, that our members on this side of the House will support the effort of the Minister of Justice and the minority Conservative government as they proceed with this piece of legislation.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, I am very pleased to speak to Bill C-26, An Act to amend the Criminal Code (criminal interest rate).

The purpose of this bill is to amend the Criminal Code to exempt payday lenders doing business in provinces and territories that have legislative measures in place that protect borrowers from section 347 of the Criminal Code of Canada, and to require that the competent authorities set limits on what the consumer is charged for a payday loan.

It was our Liberal government that put the wheels in motion for this bill by starting consultations with the provinces and territories and other stakeholders to deal with this very important issue.

If we look at it, we have these payday loan operations that fill a certain market niche, but unfortunately they really gouge consumers and some of the interest rates, as many have cited in the chamber today, can reach 1,200% per annum, whereas the Criminal Code in section 347 makes it a criminal offence to charge more than 60% interest per annum.

Some might ask, if the Criminal Code already says that, why would the police not arrest people or the crown prosecutors prosecute people who are charging clearly more than this?

That is a good question and one that I have wondered about myself. I think we really need to look at the origin of section 347 of the Criminal Code which was designed primarily to deal with what we now call loan sharks. Loan sharking is an activity carried out mostly by the underworld or by organized crime, where people who are in a desperate need of a loan would go to a criminal like this and be prepared to pay a very large amount to get a loan because perhaps they had to pay back another debt, a drug debt, a gambling debt or whatever it might be. Therefore, it became known and is known today as loan sharking and that was really the origin of this provision in the Criminal Code.

The reality is that there are many Canadians who really need the benefit of these payday loan operations because between paydays they find themselves stretched for whatever reason and they need to obtain a loan from one of these particular operations.

A payday loan is a short-term loan for a relatively small sum of money provided by a non-traditional lender. Statistics from the Canadian payday loan industry suggest that the average payday loan is valued at $280 and is extended for a period of 10 days. In order to qualify for a loan, the borrower generally must have identification, a personal chequing account, and a pay stub or alternative proof of a regular income. Payday lenders typically extend credit based on a percentage of the borrower's net pay until his or her next payday, generally within two weeks or less. The borrower provides the payday lender with a post-dated cheque, or authorizes a direct withdrawal, for the value of the loan plus any interest or fees charged.

There we have it: small loans of very short duration that help people meet their needs from payday to payday. By decriminalizing it, so to speak, which is the effect of Bill C-26, the provinces and territories will agree to regulate these same-day loan enterprises, which is part and parcel of this particular bill. The provinces and territories will regulate the interest rates charged on these payday loans. I think most Canadians would agree that 1200% per annum is exorbitant and unjustified. It puts people deeper into debt instead of helping them find their way out of a position like that.

It also begs the question of why it is that people cannot live between paydays. There are many reasons. We hear a lot about poverty in Canada, of course, and we have done many things to try to alleviate poverty, one of which was to have a strong economy. Certainly our Liberal government cut taxes for low income and medium income Canadians.

The Liberals also introduced a number of programs like the national child benefit, which is an example that I would like to highlight. We brought in the federal child tax credit, but unfortunately, the province of Ontario, where my constituency is located, has clawed back the federal child tax credit 100%. From the point of view of the recipient, that makes it neutral. The benefit that we tried to convey was clawed back by the government in Ontario. That was done by the Harris Conservative government. The Liberal government ran on a platform to take back the clawback, but it has not done that. That affects many groups in the province and certainly does not help families and the working poor. We should begin to address it.

I have been talking about working families in the low to medium end of the income spectrum and I am sure we can find individuals like that who need loans to get them from one payday to the next; it might be monthly or, depending on how they are paid, bi-weekly. They may need to make a large capital acquisition. Maybe their stove has crashed. Maybe they have other urgent expenses. They need help from payday to payday with a loan so they go to one of these payday loan companies. We have seen these companies grow in large numbers and in size and scope across Canada.

Another group I would like to touch on is seniors. In my riding of Etobicoke North, I encounter many seniors. Many of them are living on fixed incomes with old age security and the Canada pension plan. Some might benefit from a company pension as well. I think these people are facing rather unique cost pressures. Old age security is indexed every year, but it is indexed to the general cost of living.

I have done some research on this. I am going to be coming to Parliament with an initiative in the not too distant future. What has been found is that the cost of living index that is presented to seniors is not the same as the cost of living index or the cost pressures facing Canadians in general. We can see a number of reasons for that. We could look at property taxes, rents, insurance rates, energy costs and food costs. These are cost pressures that seniors face. If one is on a fixed income, this can create quite a problem.

Our Liberal government brought in the guaranteed income supplement and made some one-time changes to it. This is another area that we should look at. I believe that we may need to develop a particular cost of living index for seniors, one that reflects the basket of goods and services they must deal with.

Given that, we should also look at perhaps a one-time change in the old age security and then index it to this new index. I appreciate that this would cost the federal treasury some money. I do not mean to minimize that, but I think it is an area we need to look at. Our seniors built this country and we need to respect that. We need to help them deal with the cost pressures they face and the standard of living they are entitled to.

I will be supporting Bill C-26.

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, the member said that the amount of the old age pension would probably have to be increased. If a certain income level is needed to obtain payday loans and people can at the same time borrow money on their pension cheques, that is going to have perverse effects. What it means is that people who need money will be spending their cheques even before they receive them.

Are we going to go against the welfare of senior citizens in order to solve the payday lender problem? Will the member find an unequivocal way of getting the old age pension raised? I would like to hear what he has to say on that subject.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, I thank the member for Shefford for his question.

Bill C-26 addresses a subject that we have discussed today: the very high interest rates charged.

Frankly, I am not sure if these payday loan organizations will accept pension cheques. Perhaps they do.

I think there are two different issues. If pensioners have problems getting from payday to payday and a pension is their only source of income, increasing their pension will not expose them to further difficulties. It will keep them away from the payday loan organizations. I do not see the two as running contrary to each other.

I think if we were to do something with seniors that could help them with their pensions, it could keep them away from payday loan organizations. In fact, I suspect many seniors are not aware of the proliferation of payday loan organizations. Some may be, but some may have difficulty finding their way to the payday loan organizations and dealing with some of the complexities. I am not sure that they are big customers, but I am only saying that. I do not have any research or information to support that.

I do not think that what I am suggesting here with respect to old age security and what Bill C-26 does conflict with one another in any way shape or form.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, my colleague's concern for pensioners tweaked my interest. I think he will agree with me that one of the root causes for the proliferation of these payday loans is that there have been so many bank closures, at least especially in the inner city in the riding I represent. As the banks closed, that void was filled with these fringe banking outfits that actually charge to cash cheques. I did not know this until recently, but it is against the law to charge to cash a government cheque. Some of these places charge 3%, 4% or 5% to cash even government pension cheques.

As for my question, I wonder if my colleague is aware that the plight of pensioners who rely solely on OAS-GIS has actually gotten worse. In the last federal budget, the government decreased the basic personal exemption from $9,039 to $8,639, I believe, so it was decreased by $400. That means $400 more that a senior is paying taxes on. Even at the lowest rate of taxation, which I believe is 15.5%, seniors are now paying taxes on $400 more than they ever used to before.

I did some quick math, and my colleague is probably better at math than I am, but that is $60 or $61 a year, which only looks like $5 a month, except that because this came into effect on July 1, the government doubled it for the remaining six months to spread it out over the whole year, so it is a cut in pay of $10 a month. When a lot of seniors voted for the Tories to form the government, I do not think they knew they would get their pay cut by ten bucks a month for that six month period and five bucks a month thereafter. Was my colleague aware of that? Does he run into that issue in his own riding?

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, to make room for the cut in the GST reduction, the Conservative government in its last budget increased personal income taxes and the basic rate to 15.5%. That would affect many seniors. I am not sure if that deals with the specific point the member was making, and I have not heard that specifically, but clearly the government is not quite so caring of low and middle income Canadians. A GST cut of 1%, and now I presume in the next budget it will be another 1%, will not really benefit the poor and the medium income families.

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, I will share my time with the member for Berthier—Maskinongé. First, I am very pleased to speak to Bill C-26. I totally disagree with my colleagues' assertions, as do all Bloc Québécois members. Bill C-26 is a underhanded means to help people who have difficulty getting a loan to get money from payday lenders. These payday lenders have put pressure on the government to legalize their existence with a clause in the law, clause 347, which allows them to demand up to 60% in interest, and this can be verified. Indeed, it is the interest rate that appears in section 347 of the Criminal Code.

However, the major problem in this issue is the fact that the federal government is once again intruding into Quebec's areas of jurisdiction. In Quebec, there is already an act that deals with these loans, and the entire loan is at a maximum interest rate of 35%. Thus, any other loan with an interest rate of more than 35% is loansharking. The best way to gouge people is to lend them money at an interest rate of 60%.

Which group will take over the payday loan market? I believe it will not be the merchant who owns the corner store or the butcher down the street. The member was talking earlier about organized crime. This is the best way to launder money. It is obvious that these people will take the legal road to do something that is illegal. If the House of Commons is not aware of this, it will open the door to these people, who will be able to demand interest rates of up to 60%.

In addition, I sit on the Standing Committee on Industry, Science and Technology, where Bill C-26 was debated. How long was the debate? An hour. Why? Because the people in the other political parties agreed that it is a great bill. We are therefore going to pass it without wondering what people in Quebec or other provinces think, whether or not they think it is good or whether it encroaches on provincial jurisdictions. I should even mention that, in committee, we asked whether any of the provinces were opposed to this bill. To our great surprise, none were.

During that same meeting, we received a communiqué from Quebec saying that Quebec disagreed with Bill C-26.

Why should Quebeckers, who already have legislation covering these sorts of loans that caps interest rates at 35%, have to ask the federal government for an exemption from the bill?

Why should we let the government interfere in our jurisdictions?

If the rest of Canada thinks this is fine and dandy and wants to endorse this system, it can do so. But Quebec's position is that this is not how it is going to be and that we will fight tooth and nail to make sure this system is not put in place.

On both sides of the House, Conservative and Liberal defenders of the bill are saying that they represent Quebeckers. What they are really saying is that they are not listening and that they have bills and will adopt them at everyone's expense.

They are saying in the House and in the newspapers that they represent Quebec's interests and are going to stand up for Quebec. I cannot say what I am thinking, because I would be reprimanded, but I can say that that is not true.

There are members opposite who say: “This is good, we are able to make progress for Quebec”. I think they are wrong. They do not know what they are talking about and they will say just about anything.

What is more, this bill addresses people who earn a salary, including seniors. Why? Because they receive an income every month and are able to certify to payday lenders that they have a salary. They can borrow against their income. How far will we go with these measures to give them a chance to spend their money? If a problem arises, these people have to turn to payday lenders to borrow money. As I was saying earlier when I asked the Liberal member, is there a problem? Are our seniors not being paid enough money? They built our country, Quebec especially. Are we going to abandon them like this? If they need $100 to fix their broken washing machine, will they have to turn to payday lenders? There were no payday lenders before. Why would we need them now? To give others a chance to become wealthy and launder money? I do not believe this is a good solution.

Furthermore, the designation process—and this is the problem—requires that the province write the federal Minister of Justice to inform him that it has a law and is seeking a designation. If, on the recommendation of the federal Minister of Industry, the Minister of Justice feels that the province meets the requirements, the Governor in Council will receive recommendation to grant the exemption. This process should be relatively simple.

Why should get on our knees to ask the federal government for permission to be exempt? We have nothing to ask of it. We have our own laws. We are capable of respecting them and enforcing them. We do not need anyone to be a big brother and tell us what to do.

I strongly believe that this bill is not appropriate in that legislation is generally left to the discretion of the provinces. It is as simple as that.

When we talk about legislative measures, especially measures on consumer protection that generally cover payday loans, I do not think that consumers would agree with the way the government wants to encourage them to consume even more and have the opportunity to get money easily. It is easy to get money from payday lenders.

Much worse could be said. Michael Jenkin, director general of the office of consumer affairs and co-chair of Industry Canada's federal-provincial-territorial consumer measures committee, said, “I have a few words, just for a moment, on payday lending. It's a form of short-term lending through which the consumer typically borrows several hundred dollars for 10 days to two weeks. The borrowing costs are very high, as you probably know. They are usually in the range of, for example, $40 to $75 for a $300 loan for two weeks...”

He told us the costs were very high. Imagine paying $40 to $75 interest on a $300 loan for two weeks. It is not usurious, but it sure is close. It is not far off. I can see the Quebec members nodding off on the other side of the House. They should listen more rather than think about their next snooze. That way, they might understand this a little better.

That is not all. In 2004, the federal, provincial and territorial ministers responsible for consumer affairs expressed concern about the abusive practices and high costs consumers encounter in this parallel market, such as with payday lending. One study showed that payday loans were far too expensive and that the interest rates were too high. That was in 2004. It is now 2007. Now, a bill has been introduced to confirm that everything is just fine.

I would like to conclude by saying that we will vote against this bill. We in Quebec will take care of this responsibility ourselves.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I am one member of Parliament opposite who was not sleeping. I was listening very carefully and with great interest because I am trying, for the life of me, to understand why the Bloc is so opposed to this bill when the rest of the country needs it so very much.

My colleague said there is no room for it, there is no need for it, speaking about this bill. In actual fact, this bill is the legislation which would allow my province of Manitoba to do something about the thieves, the criminals, who are ripping off the people in my riding.

A lot of the payday loan industry are charging rates of interest that are illegal, that are criminal. They are gouging them and they are sucking the life right out of the inner city of Winnipeg; however, the federal government has jurisdiction over this. This bill would give the jurisdiction to the provinces, so that my province of Manitoba could do something about these, as I say, blood-sucking leeches who are profiting from human misery, from low income people.

I should tell my colleague that these payday loan outfits are charging as much as 10,000% interest. Not even a cocaine dealer, not even the Hells Angels, gets 10,000% interest. But in actual fact, we now know some of the payday loan industry is in fact run by organized crime because where else could one get that kind of money? So, we went to the federal government and said to cede this federal jurisdiction to the provinces so that we can clean up this mess within our own jurisdiction.

I thought that was exactly what the Bloc Québécois wanted, for the federal government to give jurisdiction to the provinces. In every speech I have ever heard from my colleagues from the Bloc, they have demanded for the federal government to get out of their business and for them to have jurisdiction over their own issues. In this case, I agree with them. We should pass this bill, so that the provinces could solve their own problems within their jurisdiction.

This reminds me, in a way, of the ban on pesticides. The NDP tried to get pesticides banned in Canada. Most members of the House of Commons agreed. The Bloc voted against it, and the bill was defeated, because Quebec has already banned pesticides. Well, just because Quebec has already solved its problem, please do not stand in the way of the rest of us who are trying to solve the same problem in the rest of Canada.

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, as we all know, the Constitution grants provincial and territorial governments jurisdiction in matters of consumer protection, by virtue of their powers in the area of property and civil law. If a province does not yet have such legislation, its leaders have the option of creating it. If they have not done so and wait for Canada's big brothers to enact legislation—whether they agree with it or not—section 347 of the Criminal Code imposes an interest rate of 60%.

While criminal organizations, as we just heard, demand 10,000% interest, the rate would be set at only 60%. If the rate of 60% suits Albertans, that is fine. In Quebec, however, we already have legislation that covers payday lenders, and the interest rate is set at 35%. Any loan that has an interest rate higher than 35% is considered loansharking.

We have already enacted legislation in Quebec to deal with this type of loan. What we object to is that we have to ask for an exemption in order not to be subject to this legislation. The province must prove that it already has legislation, which must be sent to the governor in council, and the governor in council or Prime Minister must decide if the province should be subject to this legislation, and must ensure that the province's legislation conforms.

Clearly, Quebec already has such legislation and does not need anyone to tell it how to manage that legislation.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, it is a pleasure to speak on Bill C-26, An Act to amend the Criminal Code (criminal interest rate), following the remarks of my colleague, the hon. member for Shefford.

According to the government, the purpose of Bill C-26, which we are debating today at third reading, is to respond to the concerns of some provinces and territories as well as several consumer advocacy associations which believe that it is urgent and necessary to regulate more strictly payday lending, which is a growing industry in some provinces.

While it may seem simple and even generous, this bill is, as the hon. member for Shefford aptly explained, yet another attempt at interfering in jurisdictions that belong to Quebec and the provinces. The Conservative members across the way are shaking their heads saying no. They should read the bill.

Even if the government's intent was to supervise better at the federal level to prevent interference in provincial jurisdictions, it is once again interfering in an area that we, in Quebec, are managing superbly.

Members will understand that the Bloc Québécois will oppose this bill which opens the door to a federal veto on tools currently used in Quebec to regulate such activities through the Consumer Protection Act, among others. I do hope that government members from Quebec are familiar with that piece of legislation. Have they forgotten about it since coming to this place, the House of Commons? I am not sure, but I think so.

As I said, the government described this bill as a response to many concerns raised about the payday lending industry. Granted, this is am industry that has been accused of all sorts of questionable practices, including high lending rates on future pay, insufficient disclosure on contractual terms, if any, and all too often unfair debt collection practices.

Before getting into the details of our reasons for opposing this bill, I would like to say a few words about these increasingly popular payday loans.

This is a disturbing phenomenon because it reflects a troublesome reality, the increasing presence of poverty. The people who borrow from these payday lenders often find themselves short of money. At present, the Criminal Code sets limits on payday lenders. Interest rates may be as high as 60%. I am sure that no member of this House would borrow a portion of his or her salary at such a high interest rate. The target is people without resources. That is why such activities are governed in Quebec by the consumer protection act, and the interest rate can be no higher than 35%, while here 60% is mentioned. I think 35% interest is already high.

In Quebec, payday loans are becoming less and less common. Mechanisms have been put in place; support groups for the poor have been created. There are even some CLSCs that loan money to clients with temporary needs, such as food for a week. All sorts of social measures, such as food banks, have been set up to help these people, all so they will not have to take out loans they cannot pay back. When someone borrows a portion of their salary at that kind of interest, for two or three weeks, they repeat the same scenario and keep getting deeper into debt. It affects quality of life for the borrowers and their families.

According to the Canadian Payday Loan Association, payday loans are unsecured small-sum short-term loans typically for a few hundred dollars. As we know, they are usually for two weeks. Payday loans are specifically designed to help customers with one-time, unanticipated expenses. The average payday loan is around $280 for a period of 10 days.

We can see that these loans are for small amounts to meet what are supposed to be one-time needs but are often related to rent, accommodation and housing. Payday loans are really designed for the low income earners in our society.

As I have said, I am sure that government officials, our ministers, members of Parliament and other members of society do not take out payday loans. We are talking about the poorest people in our society here today. I heard what my NDP colleague said, that we were doing this to help the least fortunate. It is incredible!

This Conservative government tends to minimize and sometimes even ignore the problems associated with poverty. We saw this recently, when the government cut funding for literacy programs and Status of Women Canada programs. My colleague and I recently toured New Brunswick and Newfoundland. People were offended at the cuts to programs that contribute to our social fabric. Once again, the government is introducing a bill to squeeze these people further.

Payday loans, also called wage advances, are a very expensive way for consumers to meet a temporary need for credit. This type of loan is expensive, because lenders charge numerous, often excessive administrative fees, not to mention high interest rates.

In return for making the loan, payday lenders will require a post-dated cheque or a preauthorized debit for the loan amount and will charge applicable fees as well as interest. With the addition of the various fees, the amount to be repaid is greater than the amount of the initial loan.

This puts the squeeze on borrowers. Here in the House of Commons, we are trying to help people in provinces where payday loans are not regulated at present. I understand that, but I do not believe that a measure such as this is the best way to help people in need. It is important to remember that these are the people this bill targets.

As you know, we are opposed to this new bill. It contains two main measures. First, it adds a definition of a payday loan to the Criminal Code. Second, it amends section 347.1 of the Criminal Code to allow exemptions from that section.

There are two parts to the new exemption mechanism. The first part specifies that section 347 of the Criminal Code and section 2 of the Interest Act no longer apply to the payday loan industry of a province when the amount of money advanced is $1,500 or less and the term of the loan is 62 days or less, and the lending company is licensed under the laws of a province to provide such loans.

The second part—and this is where we have a problem—involves a political decision by the federal government.

The federal government exempts from the application of section 347 of the Criminal Code and section 2 of the Interest Act provinces designated by the federal government for passing legislation that the federal government considers to be consistent with its objectives for regulating this industry.

In conclusion, why should Quebec submit to the rules established by the federal government in order not to be subject to criminal interest rates, when Quebec already has consumer protection legislation that properly regulates this activity, which is in fact all but non-existent in Quebec? The members from Quebec now in this House know this. We believe that 60% is an almost criminal rate of interest. In our view, it is usurious.

I have explained in my speech that we have found other ways of helping those in need.

The Bloc Québécois therefore opposes, in principle, the bill—

[The Acting Speaker, Royal Galipeau]

Order.

For questions and comments, the hon. member for Yukon.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I have essentially the same question as my colleague from the NDP. I have a hard time understanding how the Bloc Québécois could be against the bill. My understanding is Quebec has its own very good legislation and it would like that to prevail. However, right now Quebec is subject to section 347 of the Criminal Code and there could be a conflict. My understanding is the Bloc would like Quebec to be exempt from these provisions.

The bill would exempt Quebec. It removes any conflict that there might be, in which of course the federal law would prevail. If we have a bill that would give the authority to Quebec, would remove it from falling under section 347, why would Quebec not want more autonomy?

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, as I was saying earlier in my speech, given that Bloc Québécois members define themselves as defenders of Quebec's real interests—not like certain other members in this House from other parties who sometimes say they are defending the interests of Quebeckers—we cannot vote for a bill that gives the federal government power, whereby Quebec has to seek exemption from the federal government in a jurisdiction that is currently being well taken care of by Quebeckers.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Mr. Speaker, we have just seen further proof of the Bloc's powerlessness and arrogance. Indeed, we can see just how blinded they are by their obsession to achieve independence. They are refusing any progress for the least fortunate, in the name of an ideology and a sacrosanct principle. This time, they are refusing to fill a legal void that exists.

My question is simple. How can the members of the Bloc Québécois oppose a bill that aims to help those least fortunate, whether from Quebec, Alberta, Manitoba or Prince Edward Island? How can they justify such stubbornness? Are we in the wrong House here? We are duly mandated not only to represent our constituents, but also to ensure that our government implements Canada-wide measures to protect those least fortunate.

The Bloc has an opportunity here to reach out to those least fortunate across Canada. Yet, rather than saying that this is a good bill, here is the Bloc pulling back, hiding behind its sacrosanct principles and, in the end, refusing to help ensure that we can all live in a better country.

Here on this side of the House, our position is clear. We support all measures that will help those least fortunate, no matter what province they come from. We are acting and action is being taken. Of course, as usual, the Bloc is criticizing and talking a lot, but it consistently fails to act and delivers no results.

What are the Bloc and its members waiting for before they support a bill that aims to help those least fortunate, regardless of what province they are from?

[Guy André, Bloc, Berthier—Maskinongé, QC]

Mr. Speaker, I am taken aback by the fiery speech of this new Conservative member who claims to be here to help the least fortunate.

The Conservatives have just cut student summer employment by half and slashed funding for literacy programs. These are the least fortunate people, yet the Conservatives rise in this House and claim to be further helping the least fortunate by putting forward a bill to charge a 60% interest rate to individuals who need interim financing to meet their needs.

The member said that we are in the wrong House. For his information, the Bloc Québécois is in the right House. Perhaps our friend is in the wrong one. We can see what is going on in the aerospace industry these days and how the Conservative members from Quebec are failing totally to defend the interests of Quebeckers, let alone those of the least fortunate.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to participate in the debate on Bill C-26. It is an act to amend the Criminal Code (criminal interest rate). We refer to it as the payday loans.

I want to give a little background, which I found very interesting. The payday lending industry is a growth industry in Canada. It was virtually non-existent until 1994. The payday lending industry is believed to have grown to more than 1,300 outlets. Canada's new government, the so-called—

[The Acting Speaker, Royal Galipeau]

Order please.

The hon. member for Mississauga South.

If other members wish to talk amongst themselves, I would prefer they did so in the lobby. Thank you.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the government has again seen fit to reintroduce another bill, which was introduced by the previous government, on payday loans. I believe we will find there is some extensive support for this because of the implication it has to ordinary Canadians.

A payday loan is a short term loan for a relatively small amount of money to be repaid at the time of the borrower's next payday. In order to qualify for a payday loan, the borrower must have a steady source of income, usually from employment but also from pensions or other sources, and a bank account. The lender will typically lend up to a specific percentage of the net pay for a period of up to 14 days, ending on the next pay day.

The borrower provides the lender a cheque, postdated to the borrower's next expected income payment date, for the total amount of principal, plus interest and other fees. Members have indicated that when we take the fees, interest and insurance, the cumulative cost is in effect an interest rate of as much as 60%, which by any criteria is usury and inappropriate.

One might ask who would want to pay these exorbitant rates of interest. This is the crux of the reason why I wanted to speak on the bill. It is again a demonstration that there are people out there who, in the absence of the protection of the laws of Canada, will be taken advantage of by people who see these little pockets of opportunities to take money away them simply because they are torn between needing cash today to buy food or to pay the balance of their rent, and the only opportunity they have is to go to payday lending institutions.

This is a problem because people who are in those situations find themselves without any credit rating. This means they have no line of credit and no opportunity to borrow from a bank. They probably have a bad credit rating for that matter. In addition, they would not have a credit card. Although credit card interest rates are very high, they are not 60%.

One might ask why they would borrow a net paycheque from someone at those rates when they could simply draw on a credit card. That is not even an option. We are talking about vulnerable Canadians who are faced with the only opportunity to get the cash they need to take care of the basic necessities of life such as food, clothing and shelter. The only opportunity for them is to go to the payday loan industry. The bill has to deal with that. It is the reason why the bill was brought forward in the last Parliament. I am pleased that we have had an opportunity to bring it forward in this Parliament and I hope to see it passed very quickly.

Provincial and territorial governments, as well as consumer advocacy groups, have raised concerns. The government should take solace in the fact that this is a matter which has been seen at all levels of government and society. They have raised concerns over incidents of questionable practices within the industry. It calls for the question about why the industry has not been totally regulated. That is another issue totally. The concerns involve the high cost of borrowing, insufficient disclosure of the contractual terms, unfair collection practices and the spiraling debt loads resulting from rolling over loans.

When people are prepared to charge usurious rates of up to 60%, when they want their money, they will go after people in a very draconian fashion. This all of a sudden becomes a risk to the safety and security of the people involved. Sometimes things happen, people start to go downhill and they cannot stop. They have exhausted every opportunity. They may have stumbled across this so-called payday loan opportunity, but they still cannot get out of it. What is the recourse to them? There is none. They go to jail, I suppose, if that is possible. However, in terms of the collection practices, even on ordinary consumer debt, we have seen badgering, threatening and all kinds of terrible things. One can imagine what happens out there.

There is no question that something has to be done. We get this situation where usurious people will tend to say that if they cannot pay now, they will roll it over and double the rate. All of a sudden, people are getting pennies on the dollar from moneys that they acquired through their employment.

The approach of the bill is to deal through the Criminal Code. Section 347 of the Criminal Code of Canada makes it an offence to enter into an agreement or arrangement to receive interest at a criminal rate. It is defined as exceeding 60% per year. When I looked through the speaking notes provided by the research staff of the Library of Parliament, I noted the definition of interest. I thought it was worthwhile mentioning because we are talking about the rate of interest.

Bill C-26 defines interest in the same way it is defined in subsection 347(2) of the Criminal Code. The existing definition of interest is, however, problematic in a sense that payday lenders have tried to avoid the provisions of section 347 by disguising interest as various fees and charges. Not only is there a prescribed interest rate on the loan, there are also fees for processing and other charges for things like insurance. Payday loan associations want to be sure that if they never collect, they will be able to recoup some of the money through the insurance, which is paid by the person who takes the loan in the first place.

In one business model, payday lenders incurred the operating costs associated with providing payday loans and charged customers a fixed fee and insurance type premium on each loan transaction. The premium was designed to cover the cost of providing the loan as well as the risk of loan default as assumed by the insurance company that may be owed by the payday lender.

If the insurance charges argument were to be accepted before a Canadian court, it is unclear whether the exemption proposed under Bill C-26 would apply. This could result in problematic jurisdictional challenges of provincially imposed limits on the cost of borrowing. Regrettably, it appears there still may be some difficulty from a jurisdictional standpoint to address some of the issues here.

As I indicated, the interest rate is covered under section 347 of the Criminal Code. It was not intended to be a consumer protection tool for economic price regulation. Despite its intended purpose, section 347 has been interpreted as applying to most lending arrangements in Canada, including payday lending.

The penalties under section 347 are significant: a maximum penalty of five years imprisonment on indictment, or a maximum penalty of six months imprisonment; and/or a fine not exceeding $25,000 on summary conviction.

With respect to the proposed amendments in Bill C-26, the payday lending industry can continue to operate but with controls. This is not to put them out of business, but there will be some controls should Bill C-26 be passed and given royal assent.

The proposed amendments will exempt payday lenders, which operate in provinces and territories and have measures in place to protect borrowers, from the application of section 347 of the Criminal Code of Canada. Second, they will require the jurisdictions that regulate the industry to place a limit on the cost to consumers of payday borrowing.

Some of the detractors of the legislation will say that the federal government has basically said that it does not want to deal with this and that it will instead pass the problem on to the provinces. That is not exactly the intent of the proposed bill. Making the amendment to the Criminal Code will allow everything else to continue to operate but carves this out. For those provincial jurisdictions that already have laws in place, those laws can stay in place without being affected by the bill. All it will take under the bill is for the government to designate those provinces in which the particular provisions of Bill C-26 will be applicable. Those that do not have the designation will continue to utilize their own laws. It does work.

The amendments would not apply to federally regulated financial institutions such as banks. They are intended to facilitate the provincial regulation of an industry that is not currently regulated.

Banks and other federal financial institutions are already subject to legislation, including the Bank Act, the Trust and Loan Companies Act, the Cooperative Credit Associations Act and the Insurance Companies Act.

As can be seen, there is an attempt here to deal with it and I must admit, in looking at some of the debate which took place in the first session of the 38th Parliament, I did see some argument that there still were some concerns.

We are debating this bill at second reading and we could bring forward some of those concerns in an attempt to promote questions and to raise issues at committee. On the termination of the debate at second reading we will vote on the basic principles of the bill. The committee that deals with the bill is where we will have the opportunity to hear from representatives of the payday loan industry and all the stakeholders. I am sure there will be some case studies. People have found themselves in a situation where usurious rates have been charged.

Very briefly I want to go over a couple of the clauses. Clause 1 updates the wording of section 347 of the Criminal Code with respect to the fine not exceeding $25,000 and changes “notwithstanding” to “despite”.

Clause 2 amends the Criminal Code by adding subsection 347.1(1) which retains the definition of interest found in subsection 347(2) and adds the definition of a payday loan. It is important to have that in there. The definition is:

“payday loan” means an advancement of money in exchange for a post-dated cheque, a pre-authorized debit or a future payment of a similar nature but not for any guarantee, suretyship, overdraft protection or security on property and not through a margin loan, pawnbroking, a line of credit or a credit card.

Clause 2 of the bill introduces new subsection 347.1(2) which exempts a person who makes a payday loan from criminal prosecution in the following circumstances; first, that the loan is for $1,500 or less and the term of the agreement is for 62 days or less; second, that the person is licensed by the province to enter into the agreement ; and third, that the province has been designated by the governor in council under new subsection 347.1(3). Subsection 347.1(2) does not apply to regulated financial institutions such as banks.

Subsection 347.1(3) states that the provisions outlined will apply to provinces that are designated by the governor in council at the request of the province. This is an opt in by the province.

The only area I would like to comment on has to do with the payday loan industry. The growth of this industry has focused attention on the industry and its practice of charging relatively high rates of interest. The industry really has brought it on itself. The critics have called for prosecution of the payday lenders under the Criminal Code provisions, even if such action reduces the profitability of the industry or results in its abolition.

Proponents of the industry point to the growth of payday loan companies as evidence that the industry is fulfilling an otherwise unmet need for short term credit and/or convenience. I am not sure that the case studies of individuals will show that there is a high demand in the marketplace for this service by people who just need a little short term credit. Anybody who is prepared to pay effectively a 60% interest rate on a cash advance clearly has no credit and no options. This is a serious problem which I believe is already creating great harm in communities across the country.

Proponents have argued that instead of an outright ban on payday loans the federal government should allow the provinces to regulate the industry in the interests of restricting some of the more abusive industry practices, such as insufficient disclosure of contractual terms, aggressive and unfair collection practices, and the rolling over of loans. The payday loan industry itself has proposed self-regulation as a means of addressing some of the concerns associated with the lending practices.

There is obviously room for discussion. Even the industry itself is a proponent of self-regulation, but for this issue, the more the public learns about the usurious practices and the lack of protection for people who are vulnerable and put under duress to pay usurious rates, the more I think Parliament and the Government of Canada must take action.

Some commentators have suggested that the federal government is merely transferring the problem to the provinces, which may or may not adequately regulate this industry, but already there are provinces that do so. Transferring the responsibility to the provinces may also lead to a patchwork of different laws and regulations and a lack of uniformity and enforcement, some suggest. It is true that the provinces are the masters of their own legislation and also in terms of the mode in which they operate.

They also take into account the fact that there are credit organizations that do provide the same or similar products but do not charge usurious rates. This allows the flexibility that may be necessary so that it does not deal with businesses that are operated in a fair manner.

Some commentators have advocated reforms to section 347 of the Criminal Code beyond those provided by Bill C-26. The Supreme Court of Canada stated that section 347 “is a deeply problematic law”. In addition, there is concern that the provisions set out in Bill C-26 could cause legal uncertainty in relation to negotiating larger scale financial transactions such as bridge loans and convertible debentures.

Clearly this is not as straightforward as might first be thought. Members will be aware of that. I think it is going to be important for our members on committee to seek appropriate witnesses to make sure that we have the facts and that we do in fact, as we pray at the start of every day in the House, make good laws and wise decisions.

Finally, a number of other stakeholders have made recommendations that they believe would reduce the need for payday loan companies, including: first, government led education programs designed to promote financial literacy; second, the promotion of competition from traditional banks and other financial institutions in order to better control costs in the alternative consumer credit market; third, reforms to make the process of bank closure in low income and rural neighbourhoods more onerous; and finally, government aid for the establishment of community banking operations in low income neighbourhoods.

It is clear that there is a problem out there in terms of the usurious rates being charged on payday loans. It is also very clear that there are many stakeholders, including community groups and organizations and all levels of government, that have expressed a concern and support for changes to be made. I believe that we will find solid support for Bill C-26 to bring forward some constructive ways in which we can address the problem. In referring this matter to the justice committee, I suspect that we may even have some excellent witnesses there to provide some of the answers to the concerns raised with regard to potential jurisdictional or legal problems as prosecutions may come forward.

In summary, I support Bill C-26. I am pleased that the current government saw fit to bring forward a good Liberal bill from the last Parliament.

The House resumed from February 5 consideration of the motion that Bill C-26, An Act to amend the Criminal Code (criminal interest rate), be read the third time and passed.

[The Speaker, Peter Milliken]

When this matter was last before the House, the hon. member for Mississauga South had the floor for questions and comments consequent on his speech. There are 10 minutes allotted now for questions and comments to the hon. member for Mississauga South. I therefore call for questions or comments.

Resuming debate. The hon. member for Sault Ste. Marie.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, I am pleased to stand this morning to put a few comments on the record where this important public business is concerned.

I am particularly pleased to offer some thoughts on the bill and to support it given the journey I have been on over the last nine months across this province to speak with people in the communities about the issue of poverty. I have spoken with some of our more at risk and marginalized citizens about some of the challenges they face as they try to get on with their lives, buy the essentials, pay the rent, feed their kids and deal with the ever-changing financial circumstance that they find themselves in as governments cut programs, the economy changes and housing becomes more difficult to access while looking after children becomes a greater challenge.

At this time in our country we have these payday loan operations setting up in neighbourhoods all across the country. They are on every corner in the downtown area of most communities. The bill today tries to provide some regulation and direction.

The question we all need to ask is why people find themselves so desperate these days that they need to turn to lenders of this sort that charge the high rates of interest that we see in these instances.

As a party we have begun to focus, directly and in a disciplined way, on the whole question of fairness in our country at the moment. Why is it that those who are well off, well placed and have lots of resources at their disposal can get all the services they need to manage their lives while those who are less well off, have fewer resources or are less connected need to beg, borrow and steal? They are the ones who need to look really hard to find institutions that will actually lend them the money they need and will work with them around some of their needs. A large discrepancy exists there.

Why is it that our banking system, which was put in place, I believe, in partnership at one time with financial experts, governments and institutions interested in this public business and who were there to serve all of us, has come to a point where in many communities the only vehicle left for banking is either an ATM that charges people $1.50 or $2.00 to use it, or to go to payday loan operations which people, more and more, are flocking to as life unfolds.

It seems to me that somewhere along the line we have missed the ball. We have allowed our banks to become institutions that are no longer charged with the responsibility to service all of us who live, work and raise families in Canada and who try to keep body and soul together in communities in this wonderful country. The banks have become institutions of big investment and of very complicated financial dealings. They are less and less interested in the actual reason that banks were set up in the first place, which was to be a place where we could take the money out from under our beds and mattresses and put it some place where it could be dealt with in an organized and responsible fashion and given back to us when we need it.

The banks, in turn, were allowed to lend that money at an interest rate that would create some profit for them. They could invest it in ways that would allow them to continue to develop ways to be of service to us. Alas, that is not the case anymore.

The big banks are closing down branches all across the country and fewer services are being made available within the existing branches by way of tellers who we can walk up to, speak to and get advice from and by way of the hours of these branches. More and more people are being pushed out of necessity to access the payday loan operations. We in this place need to look at that.

What are we doing to challenge the banks to be more helpful? As I cross the country I talk to people about the emerging and very difficult circumstances of poverty in which many people live. The poor, oftentimes, cannot even open a bank account in some of the larger banking institutions. They need bank accounts to cash any cheques they might receive from government or from work they do but which pays them so little that the banks are not interested in their business.

We need to challenge banks in a way that will once again make them interested in the little accounts that so many of us, when we were younger or starting out, had at our disposal so we could write cheques or access loans whenever we needed them to maybe buy a house, a car or pay for our children's educations.

Literally hundreds and hundreds of people in every community I have visited, from Vancouver to Toronto, Calgary to Victoria, Castlegar to Penticton and Hamilton, are saying that because they cannot access these banking institutions, they cannot open a bank account and, therefore, cannot take advantage of the services those institutions are supposed to provide to all of us. In turn, they must now turn to the payday loan operations, the loan sharks who are all over the place in this country.

People who are paying those exorbitant interest rates for that money are finding themselves going deeper and deeper into debt to a point where they lose all hope of ever getting out of it without some serious and significant help from government and from those of us in communities who actually care.

It is good that we are here today and for the last while in this place discussing this issue because I actually do not know what people who are forced to access some of these service would do if these services were not available to them, which flies in the face of some of the comments that some of my own colleagues and people from every party have put on the record here over the last few days where this piece of business is concerned.

They are institutions that take advantage of people by charging these very high interest rates. However, on the other hand, I do not know where some of these people would go if they were not there.

It is good that we regulate. Some in that industry have asked for regulation because they do want to provide a service. They do want to act in good faith and to be controlled. They want control over those rogues in the industry who would give everybody in that industry a bad name and who are some of the people who are pointed to here and talked about in such derogatory terms, as I have listened to the debate.

However, if we, as a Parliament, are not going to take the banks to task and work through regulations concerning those institutions to actually provide to all Canadians the kinds of services that they need to manage their financial affairs, those who are most in need of those services, the most at risk and marginalized of our citizens, then I guess we need to look at where they are going for those kinds of services and ensure they are not again being abused.

That is why I stand today with my colleagues in the NDP, looking for fairness for families, working people and the at risk and marginalized across this country, asking that we at the very least bring the provincial governments in on this and that all of us find ways to regulate so that when people are desperate for money to cover the cost of the very basic elements of their lives they have some protection. We should not yet again, if only by default by not engaging ourselves in this kind of work that puts in place a protective regulatory regime, let down some of our neighbours, friends, family members and citizens across this country. We must make sure they are protected.

There is a bigger challenge, as I have already said, as far as this issue is concerned. As for accessing financing services and allowing people to have the ability to cash cheques quickly and to access small loans when they need them, we need to take a longer and harder look at the regulations that govern the banking industry in this country.

We have heard about the banking industry over the last few years as we or the government have tried to put on the brakes and pull back on the reins a bit as banks turn their attention to the international banking scene more and more and want to do mergers with other banks in other jurisdictions so that they can become even more engaged and involved in that higher level of financial activity. In doing so, they are forgetting the very basic reason that they were put in place.

I also want to say a word in support of an institution that is actually working very hard to try to pick up some of the slack, to fill some of the void, to paper over some of the cracks in the safety financial net that is out there: the credit unions of this country. These are institutions that in some instances were put in place, I would guess, because of the experiences of ordinary working men and women in this country in dealing with banks. To try to manage their own financial affairs, they came together, pooled their money and formed credit unions. All of us probably have at least two or three credit unions in our own communities, if not more.

In my area, in many of the small towns that I represent, where the large banking institutions have pulled out their branches, the credit unions have moved in. In some instances, they have taken over the buildings that the big banks were in and are now providing financial services. I want to give praise and great credit to our credit union system across this country, which, more so than the chartered banks, seems to understand why it was set up in the first place.

All credit unions have a board of directors made up of people who live in those communities. They hear very readily and regularly from their neighbours and friends as to what services are needed. They try as best as they can to fill that void. Alas, though, they cannot be everywhere. At the very least they have to cover their costs, and they have to try to put away some reserves for a rainy day or when a bad economy hits a particular community so that they can be helpful.

The credit unions provide the kind of service, and more and more of it, that is needed by the ordinary working man and woman and the ordinary working family in this country as they look for fairness and for access to services, because the big banks, frankly, are moving out of that business.

As well as regulating, we need some of these services that always will pop up when there is a demand. It is the nature of the market. It is the nature of our economic system and our political climate: where there is a need, somebody will come forward and fill it. I dare say that the reason some of these payday loan operations are doing the kind of brisk business that they are, and in many instances actually hurting and gouging people with very high interest rates that some folks will never be able to pay off or get out of, is that the big banking institutions in this country, which originally were set up to service all of us, have walked away in many ways from the ordinary man and woman in this country, particularly those who are marginalized and at risk.

These big institutions have done this at a time when they are paying their top executives exorbitant salaries. Top executives are getting million dollar paydays. At the end of every year, we hear banks announcing ever increasing profits. All told, for all of the banks together, I think it was $19 billion last year in record high profits.

We have to wonder about it. Even while banks make all of this money, there is the temptation to make even more of a profit next year because that is the way the economy seems to work these days. It is not acceptable any more for a corporation or a business to simply make a profit like it used to. They have to make more profit than the year before and it has to be at a bigger percentage or else the leaders of that corporation or business are deemed to have somehow been unsuccessful in giving leadership.

Corporations, like banks and others, have the onus on them to improve their profits every year, and we have to ask, where are they going to get their profits from? Alas, I guess they can ask the rich and powerful to contribute only so much, and then they turn to their workers in many ways. As we know, some of the ordinary men and women who work in banks are not making huge salaries. They are not even allowed to unionize, it seems, although attempts have been made. So banks get their profits from their workers in terms of not paying them the decent salaries that, given the work they do, I think they deserve, and then they turn to us. For ever greater contributions, through some of the fees they charge, for example, at the ATM machines, they turn to those of us who work for a living every day, who look after our children, pay our mortgages and participate in the local economy.

It is hard to believe that some folks in our society cannot access these services because they just do not have enough money. These folks are then forced to turn to the loansharking industry and, in this instance, the payday loan operators that exist in all of our communities. They have no other choice, so it is important that we regulate these industries.

As I said, we cannot forget for a second that there is a bigger problem and a bigger challenge here and that is how a government charged with leadership can challenge those larger financial institutions that are not living up to their responsibilities or the understanding that all of us have around what it is that they should be providing in the way of financial services.

That would be my message this morning to those who are listening and to those who will be participating in the furtherance of this legislation as it goes to committee, works its way through that process, and comes back to this place so we can get on with protecting families, those who are most at risk and marginalized and regulate this sector of our financial world.

To wrap up, it is good that we are regulating this industry. The industry itself is asking for it. We need to make sure that we make strong and effective regulations. On the other hand, we need to also challenge the banks to do their job effectively. We need to encourage credit unions to expand into other jurisdictions across this country so that people do not have to turn to these lending institutions as a last resort.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, in regard to the hon. member's remarks on the payday loans bill, this is an issue that we deal with in my riding of Parkdale--High Park, where increasingly the banks have pulled out of neighbourhoods and very quickly the payday loan operations have moved in to fill the gap.

As poverty has increased on the streets of Toronto, we have seen more people falling between the cracks. They are not able to set up regular bank accounts, so they resort to these payday loan operations.

I agree with having some regulation rather than no regulation. That is what the bill would allow to happen.

Could the hon. member elaborate somewhat on what the banks should be doing? When I met with one bank, representatives said that they had a cut-off level of so many transactions at a given branch and if that does not happen then they are out of the community. Does the member think there should be regulation and public debate about that level or some minimal requirement for some regular bank presence in all of our communities regardless of income level?

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, I absolutely do. We need to remind the banks of why they were set up in the first place and remind them that they used to provide that service. A bank in one's neighbourhood was a given in the past, and in fact they are pulling out now. I think we need to challenge them to move back in again. They were and could be very profitable with more services to the people of this country.

In my own community of Sault Ste. Marie, for example, a bank in the west end decided that it was going to get rid of the tellers and just have ATMs. That neighbourhood, that whole part of my community, rose up. Many hard-working families, some of them first generation immigrants to this country who had a personal relationship with their teller, said to the bank, “This is unacceptable and we are going to go someplace else”. Lo and behold, within a matter of a month or two, the tellers were back.

As a community, we can challenge the big banking institutions in that way. Of course we can also regulate the fees they charge as they find ever new and creative ways to impose them, and we can get them to stop charging those fees, because they do not need to. They are making enough money without them. They do not need to be charging men, women and families that kind of exorbitant fee to access their own money.

[Lloyd St. Amand, Liberal, Brant, ON]

Mr. Speaker, I listened with interest to the member's speech. I heard him allude to the high profits realized by banks. I heard him refer specifically to, in his view, the diminished level of service or quality of service that is provided to customers of banks and to the closing of certain branches of banks.

I heard all of that, but at the same time, he rather seems, as I understand his comments, to be in favour of allowing other institutions, payday loan institutions, to be allowed to continue to charge rates of interest which are, in my view, far in excess of what a bank would charge and to impose on the consumer additional charges and fees, with the result that the consumer ends up paying an exorbitantly high amount for the loan received.

How does the hon. member opposite reconcile those two views?

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, I think the member should have been listening a little more closely. I did not suggest for a second that I support usurious fees by payday loan operators. What I am saying is that in many instances that is the only vehicle left for people. They are turning to those places because they cannot get money anywhere else. The big financial institutions, the big banks, will not even allow the very poor and marginalized to open a bank account.

Therefore, at the very least, we have a responsibility to make sure these operators are regulated so that they do not charge the fees that they do and are not gouging and abusing people. That is what I was saying. I do not think we are ever going to get rid of them. I think they are going to be around. If people need to access money, they are going to access it. If they do not get it at the payday loan operations, they are going to get it from Joe or Jack down the road who is going to lend it to them out of the back door. Then they will pay usurious fees. The consequence of that may be way more dramatic and problematic for some of those at risk, who are our neighbours and friends.

Perhaps we should be looking at putting these operations out of existence and challenging the banks to actually provide the service they were set up to provide in the first place, but what I am saying is that if these payday loan operations are going to exist, and it looks like they will for a while, let us at the very least make sure they are regulated.

[Nicole Demers, Bloc, Laval, QC]

Mr. Speaker, I am pleased to rise today in this House to debate Bill C-26.

I will be sharing my time with the member for Richmond—Arthabaska, my worthy and eminent colleague, who always comes to the defence of the farmers. He does so in this House and outside it as well, in the ridings and throughout the regions.

I rise in this House to debate Bill C-26 because we in the Bloc Québécois support neither the bill nor the principle of it. I know of no industry that would ask government to legislate a restriction on its profits. My colleague alleged that the industry needed regulation. Regulation of the consumer industry is a provincial and territorial and local business matter. It does not come under federal government jurisdiction.

The aim of the bill, as I read and understand it and as I examine it like my Bloc colleagues, is to amend the Criminal Code, which already contains provisions to restrict the charging of usurious interest rates. Businesses operating in this type of industry want rates higher than those currently in effect under the Criminal Code.

I am not here to protect people represented by other MPs or the people of Canada. MPs will decide what legislation is needed to support their fellow citizens and protect them as required. We must not forget that 547,000 Canadians work for minimum wage and it is primarily they who need payday loans and make use of this industry.

The industry is well entrenched throughout Canada, except in Quebec. Why? Because in Quebec the government has passed legislation in this regard. Rates of interest have been set below the usurious rates charged elsewhere in Canada, well below the figure of 60%. We must keep this in mind.

Quebec passed this legislation because it is entitled to do so under its authority to legislate to protect its citizens, so that all consumers are well protected against an industry that is abusing its power and making money at the expense of the poor.

That is how I see it. It is an industry that makes money at the expense of the poor and, at present, it is primarily the industry that is pressuring the government to reconsider this legislation. That is wrong. Members have to realize that we must not give in to lobbying by the industry and that we must respect those who elected us to this House. We must provide the best framework for our citizens. Once again, this the is a provincial responsibility.

Furthermore, if we accept this bill as it is now written, we will be opening the door to a great danger. The bill states that the federal government would have the right of oversight and veto regarding provincial and territorial legislation. Imagine that the Prime Minister in this House decides to examine Quebec's legislation. We decided that an interest rate of 60% was too high and the Prime Minister could say that he does not agree. Would all Quebeckers have to pay what the rest of Canadians have decided to pay? That is not right. We have established rules to protect our citizens. That is precisely why it is important that we not adopt this bill. It meddles directly in areas of provincial and territorial jurisdiction.

Since the government was elected, the Prime Minister has been making very public speeches claiming he wants to limit encroachment on provincial and territorial jurisdiction. Yet this bill does just the opposite, giving the federal government even more powers than before. Does that make sense? I am asking you, Mr. Speaker. I realize you cannot answer me, but I know that you have been thinking about this and coming to the conclusion that what the government is doing does not make sense.

I hope my colleagues will also give this some thought and come to the same conclusion that when we legislate, when we decide to bring in a new law, that law has to represent as many people as possible, the interests of as many citizens as possible, the interests of citizens who do not have a voice.

That is why we are here. We are not here to represent industry, though we often do so when it is in our best interest. We defend industry when our citizens have jobs they want to keep and when they have the right to work.

Our first duty is to the citizens who elected us as members of Parliament. We must remember that as we discuss this bill in the House. We have discussed it over the past few days. I hope my colleagues will remember that.

I hope they will remember that the people who use this kind of service are society's poorest—the ones earning minimum wage. If we give people the opportunity to borrow money from these places, they will sink deeper and deeper into a cycle of debt from which they will have a very hard time escaping. We must remember that.

Payday lending is short term lending involving unsecured loans for small sums of money—a few hundred dollars for a couple of weeks.

Lenders require that the borrower provide a cheque so that they can get their money as soon as the borrower is paid. Earlier, the claim was made that people earning minimum wage do not have access to banks. But if they are able to write a cheque to pay a loan, then they must have a bank account. We therefore need to work with the banks to make sure these people have access to loans at much lower, much more reasonable rates. Interest rates on personal loans, consumer loans, currently range from 6% to 7%, nowhere near the usurious rates payday lenders charge.

Even the Consumers' Association of Canada is very concerned. Yet the background information on this bill says that it is at the request of the Consumers' Association of Canada and the people who use this type of company that the government is introducing legislation to amend the Criminal Code on criminal interest rates. This legislation has served Canada well to date, but Quebec has more restrictive legislation.

All consumers will lose because of this legislation. The Consumers' Association of Canada understood this. And if the Consumers' Association of Canada understood this, why are we having so much trouble understanding it? If an association that represents so many people properly, effectively and professionally understood it, why are the members who are here to represent their constituents' interests having so much trouble understanding it? The association even believes that the industry is calling for this amendment for its own benefit.

Consumer protection is within the jurisdiction of the Government of Quebec and the provinces. That is why I would ask all my colleagues in this House to think carefully before giving in to pressure from payday loan companies. I would ask them to think about all their constituents who could become trapped in this cycle of debt. We must be very careful. This bill is not what it purports to be. This bill will not help the public. It will help the payday loan companies.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, I am having trouble understanding the member's argument that somehow this is an incursion into provincial jurisdiction. In fact what we are doing is turning over to the provinces the responsibility to regulate and control this industry. Those at risk, marginalized citizens, cannot access charter banks in many instances and they are forced to get money to deal with their financial needs from other places. There needs at least to be some regulation so that the huge interest rates that are being charged can no longer be charged.

[Nicole Demers, Bloc, Laval, QC]

Mr. Speaker, we must not have read the same bill. I do not understand. The objective of the bill is clear. It is not to help the provinces legislate; it is to help the government tell the provinces what to do.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, I must thank my colleague from Laval who has just spoken with such eloquence that it will be difficult for me to follow her example during the next 10 minutes. She has very well described the debate and exposed the problem with Bill C-26, while defending the interests of Quebec, of Quebeckers, and of those unfortunate Canadians who are obliged to rely on these kinds of payday loans across the country, but not so much in Quebec. I will have an opportunity to explain that during my remarks.

I am pleased to be able to speak to Bill C-26 for the purpose of condemning it. This bill amends the Criminal Code with respect to a criminal interest rate and seeks to regulate the payday loan industry.

While on the surface it may appear praiseworthy, the bill contains what is known as a hidden defect. I imagine that among the 308 members of this House, there are some who know people who have bought a house and discovered after several weeks or months that the vendor had hidden, knowingly or otherwise, some defect in the house. In the end, those people realize that they should not have paid so much for their home. That is what is known as a hidden defect.

It is the same thing with this bill. Upon initial examination, it appears to be good. However, we notice that there is a serious problem that, in my opinion, has unfortunately been seen over and over, ever since the Bloc Québécois has been here in this House, and which probably also existed before our arrival. Mr. Speaker, during your time in office, I imagine that you have heard these arguments all day long throughout the parliamentary session. Once again, it is an invasion by the government into the jurisdictions of Quebec and the provinces. There is the problem. There is the hidden defect in Bill C-26.

Obviously, for political reasons, they will say that we are in favour of this kind of industry and that we do not want to help unfortunate people to escape from this trap, and so forth. Let it be clearly understood that we recognize the need to attack this new form of exploitation of the most vulnerable workers. We do not dispute that goal; far from it. However, why should the federal government control what Quebec already does well and, in fact, does better than what the provisions of this bill would bring about?

That is the problem. As my colleague from Laval said earlier, the Prime Minister, because of his veto, can decide to impose whatever he wants in this regard on Quebec and the provinces. Obviously, this is a serious problem.

As I said, there is nothing inherently wrong with wanting to regulate the payday loans industry more closely; it is a good thing. However, the way in which it is being done is still problematic in our view. It must be pointed out that the provisions in the Criminal Code and the Interest Act do not at present specifically regulate this new form of loan, which actually came into being in the 1990s. This is quite a recent practice. It is therefore reasonable for this Parliament to want to put some thought into the question. This is a fact of life—these payday loans we are all talking about—that is affecting growing numbers of western countries, including Canada.

Today—and this was undoubtedly less common in the past—a person can have a regular job, a wage, but still be living in poverty. This is a fact of life today, even in 2007. People have to use the services of these companies, whose practices may be questionable, including the high cost of loans, unfair collection practices and high interest rates. This what a person has to deal with when they do business with this kind of company. When someone starts to use the services of this kind of business, they are often taking the first step in the vicious cycle of poverty. It is not just an individual who suffers as a result; an entire family may suffer from this situation.

In my opinion and the opinion of the Bloc Québécois, the government should put some thought into this phenomenon rather than infringing on the jurisdictions of Quebec and the provinces. A few days ago, my colleague from Trois-Rivières said that she had looked into this matter. She also gave an excellent speech on Bill C-26 right here in this House. She cited statistics released by Statistics Canada, from which we learned that there are in Canada, at present, 1.3 million more poor households than there were 25 years ago. The government has failed to stem this epidemic of poverty, if you will forgive the expression; the opposite has occurred. The fact that there are growing numbers of poor people is one of the consequences of the proliferation of this kind of business. In Canada, 1,300 of these companies have been identified. There are very few in Quebec.

That is why we have to make a distinction, with what is happening in Quebec at present and the reason why we do not want the federal government to stick its nose into what is happening in Quebec. Quebec has succeeded in stemming the problem of the proliferation of these businesses.

There is also the Canadian Payday Loan Association, with 22 member companies that currently manage 850 service outlets throughout most of Canada. At present, there are none in Quebec.

In the past there has been this sort of company in Quebec, as elsewhere. There used to be even more of them in Quebec. That is why at some point the police, with the help of the Office de la protection du consommateur du Québec, decided to look into it. It was a chance to clean up these companies, especially those involved in loansharking, and they disappeared. That does not mean that pawnbrokers do not exist. Unfortunately, again because of poverty, people are forced to take their precious belongings—a television set, a sound system or even their children’s sports equipment—so that they can get a bit of money to buy groceries some weeks. It is easy to imagine what happens because of the high interest rates if the money is not paid back. People unfortunately lose their valuable item.

This still exists and it is too bad. We should look into it and also make sure that these people are not involved in usury.

Quebec has already put in place some tools to oversee and regulate this sort of industry by means of its Consumer Protection Act. Under this law, the interest rate must be indicated in loan contracts, and all charges are included in the annual rate. Charges for opening a file, for forms and so on cannot be added on. Jurisprudence has also established that annual rates of interest above 35% are excessive. I would remind the House that the current Criminal Code sets this rate at 60%. In Quebec, it is set at 35%.

The first thing Bill C-26 does is enshrine the definition of payday loan in the Criminal Code. The exemption mechanism—and that is where the problem lies—is twofold in design. First a province must be designated by the federal government in order to be exempt from the application of section 347 of the Criminal Code and section 2 of the Interest Act so that they do not apply to its payday loan industry. To be designated, the province must apply and meet certain conditions, those infamous conditions. Such designation may also be withdrawn unilaterally when the conditions are no longer met to the liking of the federal government. Another example of Ottawa knows best. This is the precisely where the problem with this bill lies. The member for Sault Ste. Marie said earlier he did not see any problems with this bill, but this is where there is encroachment on the provinces’ areas of jurisdiction.

I would like to remind the members that the Bloc Québécois is defending the Government of Quebec's position. Quebec's government believes that by making an exemption subject to compliance with the conditions, the federal government is clearly encroaching on a provincial area of jurisdiction. As I said earlier, Quebec is already regulating this industry without having to report to the federal government. I would like to remind the members that Quebec's maximum interest rate is 35%, not 60% as set out in the Criminal Code.

We are against Bill C-26. That said, we are not against it because we support payday lending, a business that, unfortunately, is proliferating almost everywhere in Canada but less so in Quebec. That is not the case at all. We are against it, but we believe that Quebec has the right to regulate the commercial practices of businesses within its jurisdiction, and that the federal government should not veto this in order to apply the legislation.

The federal government certainly has the power to set the maximum legal interest rate. However, it does not have the jurisdiction to regulate industries' business practices.

In closing, thanks to its Consumer Protection Act, Quebec already regulates this industry and prohibits unreasonable practices. That is why we find that Bill C-26 offers nothing new or good for Quebec, which is already equipped to deal with this situation. We do not need the federal government's veto or its encroachment on another area of jurisdiction. Enough is enough.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, I listened with real interest to my colleague's remarks, but I do have to tell him that the issue around poverty is not one that has been dealt with by the provinces. In fact, if we look at the province of Ontario, there is a significant and increasing reality in terms of poverty, and 17% of Ontario's children live in poverty.

Governments of the past, be they provincial or federal, have shown very little interest in addressing the poverty that we face in this country.

The member said that Quebec has a very good and aggressive way of dealing with these payday lenders who gouge the poor and take advantage of their misery. If that is the case, why is it appropriate for Quebec but not appropriate that other Canadian jurisdictions also have the benefit of this legislation and limits placed on those who would prey upon the vulnerable?

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, I will not question the statistics on poverty or the increase in poverty that the hon. member was just mentioning. I agree that indeed, there is increasing poverty and that is unfortunate. I too have mentioned the data from Statistics Canada on this.

I hear this question from the NDP often. They ask Quebec, which already has a law or legislation that is better than or equivalent to what is in the rest of Canada, why it refuses to allow the same type of legislation to apply elsewhere in Canada. We are not refusing to allow other places in Canada to legislate in order to counter, or at least limit, the actions of these businesses. What we are saying is that Bill C-26 is an encroachment into provincial jurisdiction.

I do not think this a concern for the NDP. It has always introduced centralist measures. That is the NDP's choice and its right. If people want to elect those members to defend that in Ottawa, that is one thing, but often those members will say that such and such measure needs to be imposed on the provinces because that is what should be done.

In Quebec, we do not operate that way. That would not be accepted and we would not be here in this House if ever we dared operate that way.

Every province is free to legislate on this and so they should. However, it is not up to the federal government to dictate what to do and impose its veto, or to put conditions on this jurisdiction since it belongs to the provinces. That is the problem.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Mr. Speaker, could the member be a bit more specific? I still do not understand how this is an encroachment into provincial jurisdiction when, in fact, it is turning over responsibility for this very important piece of work to provincial jurisdiction.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, if I understand the question correctly, the member is saying he does not understand the meaning of encroachment.

I have been speaking for the past 10 minutes. My colleague from Laval spoke for 10 minutes before that. So for a good 20 minutes he has heard what we mean by provincial jurisdiction. In addition, the Constitution provides for the distribution of powers. On this matter, for example, it is pretty straightforward. It comes under provincial jurisdiction and so the federal has no business sticking its nose in. No further explanation is needed, I believe.

Obviously, that does not mean that the federal government must not examine this situation, but it should perhaps occupy itself with what concerns it. We were talking about poverty earlier. In 2000, child poverty was supposed to be eradicated in Canada. It was an election promise for 2000. Here we are in 2007, and the rate of poverty among children is higher than it was before the famous promise was made. This is an area of federal jurisdiction. The federal government could therefore attend to that.

This particular matter concerns the provinces. Our legislation in Quebec, for example, is such that this type of business hardly exists at all. So we do not need the federal government telling us what to do and how to do it and that certain conditions would determine whether it could be done. That does not work in Quebec.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I am pleased today to rise to speak to Bill C-26, a bill which has been very much pushed by the New Democrats for some time in order to deal with the fact that more and more of our working families and individuals are falling through the cracks because they are not able to access proper banking services and they are being left in the hands of the ATMs, the free mail-out credit cards and the payday loan companies.

In the previous Parliament the member for Winnipeg North had written to the finance minister, who is now the House leader for the Liberal Party, and asked him to work with us and the provinces who were sending a clear message that we did need to make the provisions to set aside parts of the Criminal Code so the provinces could start to set some standards in dealing with the usurious rates we are seeing in the payday lending schemes.

I am pleased now to have this issue back before Parliament. It speaks to the nature of Parliament that we actually are moving for it, except of course for our friends in the Bloc because whatever the political I Ching or the shaking of the bones in their separatist camp, it has made them come out on this bill in whichever way they have. I am still trying to read their tea leaves and I still cannot quite figure out where they are coming from. But that is not really a change in course, that seems to be standard depending on whatever bill comes before the House. I am glad however that at least the majority of the House is taking this issue very seriously.

I would like to point out for the interest of members of the House and anyone back home the long history of banking in my family. I know I might not look like I come from banking stock, but I have a great long history in banking. In fact, both sides of my family were bankers.

When the mines first started to open up in the Porcupine region, the miners were immigrant families and they did not have access to credit. When a miner was injured, he did not have worker's compensation in those days and many people lost their homes. They would have to go to the company stores to get bread. The idea came to the miners to form their own system of credit.

The very first credit union I am aware of in the Timmins region was the Worker's Co-op. It was started by Charley Haapanen, a very good northern Finlander who thought we should bring the miners together. So it was the Finns, the Ukrainians and the Scots who came together and formed the Worker's Co-op. The Worker's Co-op gave credit to people who would not be able to get credit otherwise.

Over time there were political fights within the Worker's Co-op. Some people in the community thought it was becoming a little too red and definitely that was not Liberal red, so they formed another co-op which was the Consumer's Co-op which was a little bit more pink, which is not necessarily the pink we are identifying today. There was the Consumer's Co-op and the Worker's Co-op.

Charlie Angus, my grandfather, believed that the only credit union was the Worker's Co-op and we bought all our shares in it because he felt that was what served the working people of the north. My mother's father, Joe MacNeil, was a gold miner from Cape Breton and broke his back in the Macintyre Mine. He became the credit manager at the Consumer's Co-op. As a child I was at the Consumer's Co-op many times and like its counterpart it provided credit to families who would otherwise not have credit.

While other children on Sunday afternoons and on rainy days were playing Monopoly and trying to gather up as much property as possible, our family was learning the good principles of working together in the consumer credit union game. We were raised at a very young age to believe in the principles of the credit union. It is an interesting angle when we are looking at what we are dealing with today.

I should mention that the other credit union that grew out of the area in the north was the caisse populaire in the francophone communities. The caisse populaire remains in my region one of the central bulwarks for credit, for family finance. It plays a role in our community that is unlike anything done by the banks.

I am raising these examples because when I travel across my vast riding in the north I see that the banks are leaving. They are pulling up stakes. They are leaving and shutting down in communities where they made money year after year. We see them pulling out of Elk Lake, Larder Lake, Virginiatown, Cobalt.

The first bank in Cobalt was the Bank of Commerce. It was a tent in the centre of town. It was there at the beginning of the mining rush, but it is gone now, even though many families still rely on banking services. What do they have when there is no banking service in the town? An ATM at the corner store is their banking service now.

Also, families that cannot get banking services are being mailed credit cards, with a free limit, from these hucksters. We also see payday lenders moving into some of the urban areas now because the banks have pulled out. The banks make $19 billion a year in profit. They have decided that it is not worth serving average working people. We are talking about an issue of fairness. People who want to have credit and have a savings account have been denied access.

I have a number of examples of how this is done. If people are not exposed to how the banking system runs today, they may not be aware of how people fall through the cracks.

I know a student who tried to open an account the other day. The bank wanted two pieces of picture ID and an ID card with an address. She is a student who recently moved to this town. She brought a signed copy of her rental agreement as proof of where she lived. She had two pieces of photo ID, including a passport, but her photo ID did not have her address on it. The bank would not accept her as a client. Where is she supposed to go? As she was being denied service, an immigrant man beside her was also trying to get an account for his family and the bank was not interested in him.

What happens is students have to cash their cheques, so they end up going to the Money Mart. That is simply unacceptable.

Now the banks, with their $19 billion of profit and their increasingly lousy service to average Canadians, want to expand services, such as insurance, in areas where they have traditionally have had no business. One morning last week in Timmins I met with a financial advocates group. These individual brokers provide good service. They have small businesses and have provided service for years. Now the banks want to come in and compete against them.

We know what this will be like. The banks will lower their rates to put them out of business. Then they will jack the rates up once they have no competition. The banks should be focusing on their fundamental job, which is providing credit in communities such as mine in northern Ontario and in places such as Winnipeg. The member for Winnipeg North talked about how the banks pulled out all together. The banks should leave insurance to the independent insurance brokers.

We need to speak about a number of issues in terms of fairness and the ability of people to access credit. We need to look at this proliferation of payday lending schemes that are catching the people who are falling through the cracks because the banks have walked away on their obligation. The banks should address the need for credit by families. People who are falling through the cracks are now having to go to the payday lenders and are paying exorbitant rates. This is creating a cycle of poverty.

We want to deal with helping people get out of poverty. We want to help the working poor. We are speaking about people who want to have a bit of savings and some stability. The last place these people need to be going to are the payday loan companies. Yet in some places that is the only form of financial enterprise that exists. They exist because they are allowed to get away with charging outrageous levels of interest, and the hands of the provinces are tied. We now have before us the opportunity to finally regulate these players and ensure that the area of fairness is addressed.

Banks are private businesses and they are allowed to pull out of communities. We have to start looking at this issue. We have to look at ATM fees and the unfair practices of the banks. We also have to look at the need to encourage our credit unions.

My colleague from Sault Ste. Marie pointed out that just as the credit unions came into the north back in the days when the banks refused to provide credit to working families, we have a role today to ensure that we get the small inner city credit unions up and running. Credit unions are moving into some of the communities I know of where the banks have pulled out. That will provide some measure of stability for families.

However, the larger issue is we have to ensure that when people want to cash cheques, they have access to financial services and if they have to cash cheques, they are not charged exorbitant rates and become trapped into the cycle of poverty.

The New Democratic Party is very supportive of the bill. As I said at the outset, the NDP finds it cynically amusing that the Bloc has taken the stance that the federal government, through this bill, will devolve powers to the provinces and somehow, once again, that is an insult to Quebec. That is an absurd argument.

I wonder if my colleagues from the Bloc might change the argument and say that from now on they will only support bills that centralize power in Ottawa and that they will oppose any bill that devolves power to the provinces. Perhaps the real argument is that they will oppose any bill that devolves powers to the provinces unless Quebec has already thought of it. We saw this before when the Bloc opposed a bill in the House to protect children across Canada against pesticides because Quebec already had a bill, so the rest of the country was on its own.

Bloc members say that they have already looked after the payday loan sharks, that people are sitting pretty in Quebec and the rest of Canadians are on their own. They say that if the federal government changes the act in order for the provinces to regulate it, they will oppose it. It is an extremely cynical position and I am very sorry to hear it. Unfortunately, it is typical of the kind of arguments we have heard from the party across, at least since I have been in Parliament. I know the arguments go back a long way.

However, I am very pleased that we have an overall consensus on the need to move forward on the bill right now. It speaks to a notion of fairness. It speaks to the need to ensure that we have some measures in place so our working poor and our young students, who are coming into the workforce, have some protection. The issue before us is that people are being preyed upon because there is no regulatory climate for these payday loan schemes.

I will give another example of how this affects people. I worked with some young first nations people, who needed to cash cheques. They have no banking services on the reserve. They found it very difficult to get banking services when they went into major towns. When payday came, they all went to payday loan companies. That was the only banking service they knew.

Once again, we are talking about breaking the cycle of poverty, of giving people a leg up. A very important and fundamental principle of giving people a leg up is by giving them credit.

A great example of this is the whole history of the co-op credit union movement that came out of Antigonish, Nova Scotia, with Father Moses Coady and Father Jimmy Tompkins. The priests who started to work on the Antigonish movement brought that principle to the third world.

Father Harvey Steel, who was a Scarboro Foreign Mission priest, was very active in bringing the notion of co-op credit to the third world. It was a way of getting people out of poverty. When I interviewed him before he died, he said that in the Dominican Republic, giving people access to credit, allowing them to control credit and to get micro loans was a fundamental in order to give these people a chance to have a decent society.

This is a similar principle. Whether it is in the Dominican Republic, in a reserve in northern Ontario or in inner city Winnipeg or Toronto, people want to be participants of an economy. They want to have access to credit.

To reiterate my point, right now banks are walking away on their traditional role of providing credit, loans and financial services to average people, so these people are falling through the cracks. The banks would prefer to start moving into jurisdictions that they have no business moving into. New Democrats are very opposed to allowing the banks to move in and act against other business sectors, such as on insurance, because they are not providing their fundamental obligation.

What do we need to do? We need to do two things. First, we need to set this provision before us so the provinces can begin to move to regulate the payday loan scheme. This will some measure of fairness on the ground for families and individuals to utilize these services. Second, we need to find ways of encouraging the access to credit, whether it is in rural regions or inner city regions.

I go back to the fundamental argument I made at the beginning, which is the notion of the credit union. The credit union has proven itself over the last century. It is a way of giving people access, some control and some empowerment, whether it was the old workers co-op back in the days of the boarding houses, the mines and the porcupine in Larder Lake and Kirkland Lake or whether it is in my region today where the caisse populaire is stepping in to offer cultural programming, support for regional economic development and ensuring that its members have access to fair loans in a timely manner.

When I first moved back to northern Ontario, I was in a financially risky situation. I was a young worker with a young family and did not have any kind of credit history. It was the caisse populaire that gave us credit and allowed us to get that foot up. I will always remember that because we were in some pretty dicey financial situations then. I see young families today who are in that situation. The caisse populaire allowed us that first step up and it was a very important step. If there had not been those services and the only option had been the payday loans, I do not know what we would have done at that point.

I will be more than willing to entertain questions and comments at this time.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

Mr. Speaker, I listened with rapt attention as the chronicled the history of pecuniary matters in parts of Canada. He speaks warmly of the work of Moses Coady in my part of the country. I share with him the deep anxiety we have in parts of maritime Canada that banks in regions of our country seem to be leaving and people are without that service, but back to the bill.

I would like the hon. member to comment on this. It amazes me that the Criminal Code has not been effective all these years in its pursuit of unjust, unfair and criminal loans. As a parliamentarian of some breadth of experience, could he comment as to why he thinks this has happened?

I would also like his comments on the intended application of Bill C-26, which I support fully, as I have stated before. For example, the Mike Harris government would have completely ignored anything touching capitalist and pecuniary interests such as the payday lenders. What does he see in the application of this from province to province, being an effective and fair federal law? What suggestions does he have?

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, my hon. colleague's question raises a large issue. We know there are uneven applications across the country. It sometimes brings us back to the whole role of federal-provincial relations because we do need certain national standards. I would be very much in favour of national standards in terms of our Criminal Code provision for the usurious rates that we see with payday lending.

However, what we see on the ground is we have dropped the ball at the federal level. We are not in the same position as the provinces in terms of applying it. I would like one national standard to ensure that everyone is protected in the same way.

However, in terms of being realistic, at this point we have to look to the provinces to move forward. Will there be a gap? Definitely, big gaps remain. However, I feel we have one national gap right now, so the bill will be a step forward to address some of those gaps.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Mr. Speaker, I listened carefully to the presentation by my colleague from Timmins—James Bay. I especially noted his comments regarding the position taken by my party, the Bloc Québécois. I am concerned and at the same time disappointed by his lack of understanding of the political situation in Canada. Canada is not a unitary state; it is a confederation comprised of ten provincial and two territorial governments, if my memory serves me well.

With regard to jurisdiction in matters of justice, the Government of Quebec already has a law that established an office of consumer protection, the OPC. This law is more than sufficient to meet the requirements of the bill, requirements that will be applied throughout Canada.

Consequently, the present Quebec government, a government that believes in Confederation, also supports the position that its jurisdiction be fully respected with regard to the OPC and that it sees no point in a central government imposing a similar law, one that is less rigorous than its own. At present the ceiling for interest rates in Quebec is 35%, whereas with the current bill they could jump to 60%.

I would like to know what the member thinks of this position on respecting each jurisdiction. The Bloc Québécois is only defending respect for jurisdictions and is quite favourable to all comments and clarifications made by the bill. However, it must vote against the bill since this sector is already regulated by the Government of Quebec.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I thank my colleague for his explanation of the Bloc's position, but I return to the original conundrum we are facing here. We are talking about a bill that would change the code so that the provinces would be able to step into a breach on which the federal government has simply not acted.

The fact that Quebec is already there really is of no bearing. Why would Quebec say it would be completely intolerable if we changed the code so other provinces could now step up? I find that argument absurd. We are not taking powers away from Quebec at all. In fact, we are saying at the federal level that we are willing to evolve so that all provinces are allowed to start to regulate.

The argument goes back to the philosophical argument unfortunately, which is it seems that any time the Bloc or the PQ have taken a position, they have said they would block anything that would bring positive change in the rest of the country. I find that an abominable position.

We are here to represent the interests of the entire country. I am not just here to represent the people of Timmins--James Bay, but to make policy that affects people across Canada. When I speak as a member of Parliament about issues in the Maritimes, I am speaking because I am here to represent the best interests of everyone across this country.

I point back to the motion that the NDP brought forward on a pesticide ban, which would have ensured that children across this country were protected. The Bloc Québécois said that Quebec already had that in place so the Bloc members would absolutely oppose any efforts by the House to bring in pesticide protection for children in the rest of the country. I find it an abominable position.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I support the bill because we need more transparency in the financial system. We need to make it very clear to the man on the street exactly what he is getting into, whether it is banks or payday loan institutions, and what it is going to cost. We need to protect Canadians from usury.

My question for the member is similar to the question asked by my colleague. Section 347 in the code limits interest rates to 60%, so why is that not working? Why do we not enforce that? If it is not working, why do we not fix it so it will work so all Canadians have that 60% protection at least?

We say the provinces would be exempt from section 347 if they regulate, but the bill does not give them any limits. This is problematic. We are giving them an exemption from the 60% rate and they could regulate at 1,000% or whatever. Where is the protection for lower income people whom we all want to protect?

I want to make one correction to the comments made by my Bloc colleague. There are three territories, not two: Nunavut, Yukon and Northwest Territories.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I guess the question I would have to ask him would be why we are having to move on this bill now. It is because the previous government did not make any efforts to regulate the payday loan lenders.

We pushed the previous government to take action. If the provisions exist at the federal level for them to act, they could have acted. They should have acted. Why did they not act? They were not interested in acting.

I believe at this point what we are looking at is finding a way to make action possible. It seems that the recommendations coming forward from provinces like Manitoba would change the provisions in the Criminal Code so that a province could step into the gap left at the federal level. The New Democratic Party supports that.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I thank my hon. colleague for Timmins—James Bay for his eloquent presentation on the bill. I share with him the real concern about growing poverty in our country. That is why I introduced a private member's bill to increase the federal minimum wage to $10 an hour. We actually have no minimum wage in Canada at this point in time.

It seems bitterly ironic that the people who are at the very lowest end of the economic spectrum, the absolute poorest people in our society, are the ones who end up paying the shockingly exorbitant interest rates from the payday loan companies. The status quo is simply untenable. It is forcing people further and further into a downward spiral of poverty.

I am very familiar with this issue from an urban setting. Even in a place with lots of transit, people have trouble getting to a bank to do their financial transactions. In a riding as remote as the hon. member's, and especially with the large numbers of first nations people, could he talk a little more about some of the examples of people who confront this lack of banking resources in their community?

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, the reality is there are many young working people and young first nations people who have no experience at banking. Their only knowledge of banking is the loan shark they have to see once a month to cash their cheques. Without a culture of banking and savings they are doomed from the get-go.

The issue we are seeing in the north that compounds it is the fact that as the banks move out of areas, especially isolated rural regions, it is affecting seniors also. Seniors lack the ability to travel, especially on the winter roads, for example, between Elk Lake and Kirkland Lake in January, and people have to make do. We see a lot of use of the ATM. The ATM has become the bank for most people and they are paying $2 and $1.75 every time they go to access their money. This is not something they are doing frivolously; they do it because there are no services for them. There are people who do not have banking services. People are having to use the ATM.

I want to reiterate there are young people and families who are getting caught up because they are getting free VISA cards from the banks. They are being told they have credit and to go out and buy. They get themselves caught in a cycle of debt because the free credit card they get is the only ability they have to actually have money in their hands.

[The Deputy Speaker, Bill Blaikie]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker, Bill Blaikie]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Deputy Speaker, Bill Blaikie]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker, Bill Blaikie]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker, Bill Blaikie]

In my opinion the yeas have it.

And five or more members having risen:

Call in the members.

And the bells having rung:

The vote will be deferred until the end of government orders today.

The House resumed consideration of the motion that Bill C-26, An Act to amend the Criminal Code (criminal interest rate), be read the third time and passed.

[The Speaker, Peter Milliken]

The House will now proceed to the taking of the deferred recorded division on the motion at third reading stage of Bill C-26.

[Jay Hill, Conservative, Prince George—Peace River, BC]

Mr. Speaker, were you to seek it, I think you would find unanimous consent to apply the results of the vote just taken to the third reading of Bill C-26, with Conservative members present this evening voting yes.

[The Speaker, Peter Milliken]

Is there unanimous consent to proceed in this fashion?

[Some hon. members]

Agreed.

[The Speaker, Peter Milliken]

The hon. chief opposition whip.

[Karen Redman, Liberal, Kitchener Centre, ON]

Mr. Speaker, Liberals will be voting yes.

[Michel Guimond, Bloc, Montmorency—Charlevoix—Haute-Côte-Nord, QC]

Mr. Speaker, the Bloc Québécois members will vote against this motion.

[Yvon Godin, NDP, Acadie—Bathurst, NB]

Mr. Speaker, members of the NDP are voting yes to this motion.

[André Arthur, Independent, Portneuf—Jacques-Cartier, QC]

I vote in favour of this motion.

(The House divided on the motion, which was agreed to on the following division:)

Vote #103

[The Speaker, Peter Milliken]

I declare the motion carried.

(Bill read the third time and passed)

[The Speaker, Peter Milliken]

Order. It being 6:17 p.m., the House will now proceed to the consideration of private members' business as listed today's order paper.