Bill C-37 (Historical)

An Act to amend the law governing financial institutions and to provide for related and consequential matters

This enactment amends a number of Acts governing financial institutions. It also amends legislation related to the regulation of financial institutions. Notable among the amendments are the following:
(a) amendments to the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act, and the Trust and Loan Companies Act aimed at achieving three key objectives:
(i) enhancing the interests of consumers,
(ii) increasing legislative and regulatory efficiency, and
(iii) adapting those Acts to new developments;
(b) amendments to the Bills of Exchange Act to provide for the introduction of electronic cheque imaging; and
(c) technical amendments to the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act, the Trust and Loan Companies Act, the Bank of Canada Act, the Bills of Exchange Act, the Canada Business Corporations Act, the Canada Deposit Insurance Corporation Act, the Canadian Payments Act, the Financial Consumer Agency of Canada Act, the Green Shield Canada Act, the Investment Canada Act, the National Housing Act, the Payment Clearing and Settlement Act and the Winding-up and Restructuring Act.

Financial System Review Act

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, I am thankful for this opportunity, albeit brief, here today.

I had a chance to go through the legislative summary for Bill S-5, and I must say that I am always very impressed by the lot over at the Library of Parliament. I want to thank them for their research and mention, for the record, Mark Mahabir and Adriane Yong who are both from the International Affairs, Trade and Finance Division, Parliamentary Information and Research Service. We do not always give them the credit they are due, and I hope this goes in just a small way toward acknowledging the work they do for us here in the House of Commons and the Senate as well.

The committee reported Bill S-5, an act to amend the law governing financial institutions and to provide for related and consequential matters from the Senate on December 15, 2011. There were no major amendments made in the Senate, but certainly it came with, as described here, observations.

The bill amends four primary statutes under which federally regulated financial institutions are governed. They would be the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act and the Trust and Loan Companies Act. There are also major amendments to other provisions regarding the financial institutions of our country.

Bill S-5 contains various measures to update the law governing financial institutions, as I have mentioned. The shares of a Canadian financial institution being held by foreign financial institutions controlled by foreign governments is one of those and it is certainly a timely matter given the world of finance we are in. We experienced this several years ago when we slid into a recession initially sparked by some financial tools in the United States in many cases. Of course, that wreaked havoc around the globe for all financial institutions such as in Asia and the European Union, which is now suffering through this, and austerity measures have followed suit as a result of that.

This illustrates to us and the entire country that we are certainly intertwined with the rest of the world as far as financial institutions are concerned. When something causes headaches for people in one part of the world, those headaches will reverberate around every corner of the world, given the financial institutions and the technology we use to trade currently. It gives us an idea of how important this is when it comes to international institutions.

On the acquisition of foreign entities by Canadian financial institutions, as a matter of fact, we are now seeing financial institutions in this country, banks, for example, with bigger investments around the globe. We certainly see it in the United States currently with institutions such as Toronto Dominion and others, as well as in Europe and Asia. In a country the size of ours, it gives us an idea of how good we are and how large our financial institutions are, as we are able to be a major player around the globe.

On the widely held ownership threshold for banks, it was always a contentious issue. It certainly was contentious when I first came here in 2004-05 and it continues to be.

The authority of the Superintendent of Financial Institutions over certain types of transactions, the administration of unclaimed insurance deposit accounts by the CDIC and the Bank of Canada, the insolvency of financial institutions and the liability of the CDIC when acting as a receiver during receivership of insolvent financial institutions are also very important at this point. There is also the restructuring of insurance companies and the liability of officials and employees of the Office of the Superintendent of Financial Institutions and the Financial Consumer Agency of Canada.

When we look back, this bill really got its roots from Bill C-37, which was back in June 2006. There was a paper entitled “Financial Institutions Legislation Review: Proposals for an Effective and Efficient Financial Services Framework”. The legislative changes included greater disclosure for consumers in relation to investment products, very important, and complaint procedures, the introduction of electronic cheque imaging and clearing, and an increase in the widely held threshold for large banks from $5 billion to $8 billion in equity.

This reminds me of the legislation we dealt with not too long ago when we talked about copyright. We are seeing the proliferation of technology right now that allows us to transact around the world instantaneously. As a result, the legislation has to keep up with the changing technologies around the world in, as I mentioned, copyright, banking and financial institutions. It shows not only the speed and brevity by which financial transactions are able to go around the world, but it also gives us an idea that the scope has become much larger, as well as the depth of the banking institutions. Therefore, we have to look at this and update legislation, as we did with the copyright bill. It is somewhat of a new concept when we have to review it after four or five years. Nonetheless, it is a concept that is certainly necessary.

We are seeing that now with the sunset provision. The Bank Act, the Cooperative Credit Associations Act, the insurance companies and trust and loan companies contain a statutory sunset date set out some time ago. The legislative changes will include greater disclosure for consumers in relation to investment products and complaint procedures. We went through the updating measures that were contained in Bill C-37, which was introduced in the House on November 27, 2006. In order to have sufficient time, we went through this review, which went from the October 24, 2006 to April 24, 2007, to accommodate that.

That puts us in the place we are now as we go through the review once again, as it was introduced in the Senate as Bill S-5. It went through the three readings and the committee procedure and came back with some of those observations.

Clauses 53(2) and 53(3) require a Canadian bank to obtain approval from the Minister of Finance prior to acquiring control of a foreign entity, and this is important, if the bank has equity of $2 billion or more and the value of the foreign entity's consolidated assets in combination with the value of the consolidated assets of the bank's other foreign control acquisitions in the past 12 months exceed 10% of the value of the bank's consolidated assets prior to the preceding 12-month period. I hope everyone got that because there will be a test at the end of the speech, though probably not, as I excite the masses talking about financial institutions.

The minister, in contemplating the acquisition, can take into account all matters considered relevant in the circumstances, including the stability and best interests of Canada's financial system. We go back to Canada's financial system and the emphasis that we put on this to ensure it is suited for Canadians. We know that in the past we have faced this primarily from breakdowns in financial institutions around the globe. If one finds trouble or turbulent waters, that ripples throughout the global system. Therefore, we have to ensure our system is able to withstand some of the shocks that occur around the globe. The sunset clause is to renew the acts, as I mentioned earlier.

Let us take a look at Bill S-5. It does not represent a significant change in policy, per se. It is crucial that the existing sunset clauses are extended so Canada's statutes for financial institutions do not expire, which is around April 20. Bill S-5 is not what I would call an ambitious bill. It does not significantly change Canada's banking policy or address Canada's record levels of household debt. However, Canada's banking laws are set to expire.

There is one thing I can point out about the government. The Conservatives called on the previous Liberals to follow the U.S. example and deregulate the Canadian banking sector. I remember at the time there was quite a debate and there were certain stands that all members of the House took in 2003 to 2005. I am sure they wish they had them back in light of what has happened around the globe when financial institution measures such as these become critical and very important for us to consider.

Liberals will support Bill S-5 at report stage and third reading because of this. Again, I revert to what I said earlier. Given the intertwine nature of the financial institutions around the globe, it certainly falls upon us in the House to have this debate so we can ensure the regulations are updated in light of certain troubles around the world and certainly with the advent and proliferation of technology that allows us to pass our money around the world and invest.

Motion in Amendment

[Greg Rickford, Conservative, Parliamentary Secretary to the Minister of Aboriginal Affairs and Northern Development]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Financial System Review Act

[Ray Boughen, Conservative, Palliser, SK]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Bernard Trottier, Conservative, Etobicoke—Lakeshore, ON]

Mr. Speaker, thank you for the opportunity to contribute at second reading of Bill S-5, the Financial System Review Act.

This bill is important because it seeks to regulate one of the most important sectors in the country: financial services.

Today's act is significant because it regulates one of the most important sectors of the Canadian economy, financial services. In fact, this sector is a key foundation our economy depends on. It is also a cornerstone of the economy of the city I represent in Parliament, Toronto.

The act would also help ensure that Canada's financial system remains strong and secure, a system that has been made a model for countries all over the world in a period of global economic turmoil. In fact, for four consecutive years Canadian banks have been ranked the soundest in the world by the independent World Economic Forum. This has been further acknowledged by other independent observers, both in Canada and internationally.

Here is what a few are saying. Noted Toronto Sun columnist Peter Worthington has said:

Canada's banking system is now widely recognized as arguably the world's best. No Canadians fear for their deposits as many Americans do.

The influential Economist magazine has proclaimed:

CANADA has had an easier time than most during the recent global recession, in part because of a conservative and well-regulated banking system.

Finally, U.K. Prime Minister, David Cameron, has praised our system in this very House:

In the last few years, Canada has got every major decision right. Look at the facts. Not a single Canadian bank fell or faltered during the global banking crisis. Canada got to grips with its deficit and was running surpluses and paying down the debt before the recession, fixing the roof while the sun was still shining. Your economic leadership has helped the Canadian economy to weather the global storms far better than many of your international competitors.

On a broader scale, the financial services sector plays a significant part in the daily lives of Canadians, from a child making his or her first deposit in a bank account to a young family taking on a mortgage to buy their first house. Businesses in my riding of Etobicoke--Lakeshore rely on the liquidity of Canada's banking system to finance their day to day operations and their expansion plans.

Beyond relying on the financial services industry for everyday products and services, its businesses are an important economic driver. As my colleague mentioned earlier, it employs over 750,000 Canadians in well-paying jobs. Moreover, the sector represents about 7% of Canada's overall GDP.

Finally, Canada's banks are playing an increasingly large role on the world stage via their expansion in the United States, Central and South America, and in other emerging markets.

Accordingly, there is no doubt about the importance of ensuring that the legislative governance of this critical sector is effective and current.

Accordingly, today's act supports the ongoing stability of Canada's financial sector, fine-tunes consumer protection provisions and adjusts the regulatory framework to better reflect new economic developments.

Specifically, today's act includes measures to update legislation to promote financial stability and ensure that Canada's financial institutions continue to operate in a competitive, efficient and stable environment; adjust the consumer protection framework, including enhancing the supervisory powers of the Financial Consumer Agency of Canada; and improve efficiency by reducing the administrative burden on financial institutions and by adding regulatory flexibility.

Furthermore, the act will improve the ability of regulators to share information efficiently with their international counterparts; change the priority status of segregated fund policies in insolvency situations to facilitate timely transfer; clarify that Canadians, including bank customers, are able to cash government cheques under $1,500 free of charge at any bank in Canada; promote competition and innovation by enabling co-operative credit associations to provide technology services to a broader market; and reduce the administrative burden for federally regulated insurance companies offering adjustable policies in foreign jurisdictions by removing duplicative disclosure requirements.

I will quickly expand on a few of these points.

Effective and competitive financial institutions are essential for creating an environment favouring savings and investments in Canada and for improving our standard of living.

The regular review of the financial sector statutes allows the government to amend the framework as necessary so that financial sector legislation and regulations continue to be effective and efficient. Indeed, today's act is mandatory legislation. The government has a long established practice of reviewing the statutes governing federally regulated financial institutions every five years to maintain the safety and soundness of the sector for Canadians.

For the information of the House, the latest legislative review and subsequent legislation were completed in the 39th Parliament through Bill C-37. The present five-year review began in September 2010 when the finance minister launched an open consultation process with Canadians on how to improve our financial system. The financial system review act addresses a number of key areas that were identified in the review and consultation process to achieve increased legislative and regulatory efficiency.

Currently, financial institution statutes have a built-in sunset clause that causes them to lapse five years after they come into force. The proposed common sense amendments in Bill S-5 modify the statutes to lengthen the automatic extension period of the sunset date, triggered by the dissolution of Parliament, from three months to six months. This will allow greater flexibility and more security for consumers and Canadian institutions.

We all know that consumers have the ability to manage their finances. In properly managing financial affairs, we know that knowledge is critical. That is why the government is moving forward to implement the recommendations of the task force on financial literacy aimed at improving financial literacy for all Canadians.

At the same time, the government is responding to concerns about the terms and conditions associated with network branded pre-paid cards by developing measures to enhance the consumer protection framework.

Changes in today's legislation fine-tune the consumer protection framework and enhances the supervisory power of the Financial Consumer Agency of Canada by confirming that all Canadians are able to cash government cheques in amounts of less than $1,500 free of charge at any bank in Canada; and increasing the maximum penalty for violation of a consumer provision, consistent with penalties for other violations under financial institution statutes. These are all important measures that will protect consumers when dealing with financial institutions.

As members know, the rate of change in the financial services sector has only increased in recent years. Another objective of today's act is to allow financial institutions to respond to change by allowing them to better adapt to new developments in the industry. In other words, financial institutions must be able to effectively respond to developing trends such as globalization, convergence, consolidation and technological innovation.

To summarize, the measures proposed in the financial system review act would reinforce stability in the financial sector, fine-tune the consumer protection framework and adjust the regulatory framework to new developments.

Renewing Canadian financial institution legislation on a regular basis has resulted in a robust and effective financial system that is aligned with and more responsive to developments in the financial markets and the broader economy. Today's act provides framework that would benefit all participants in the financial services sector, financial institutions as well as all Canadians. It maintains the longstanding practice of ensuring regular reviews of the regulatory framework for financial institutions, a unique practice that sets Canada apart from almost every other country in the world.

Therefore, I urge all members to support the proposed financial system review act.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Madam Speaker, I was trying to save time. I thought I had received unanimous consent.

On the surface, this bill does not seem to have any major points of contention, as I have already said, but we cannot assume that everyone sees it that way. Financial institutions are a pillar of our economy and have to be treated with more respect. Allowing the Minister of Finance to have veto power over the acquisition of foreign entities by Canadian banks is something that should be analyzed further. The government tells us that this is to allow us to prevent crises like the one in 2008, but is this really necessary? No Canadian bank had problems similar to the ones experienced by the American or European banks and there is nothing to suggest that this could happen in the near future.

Why are the Conservatives imposing this condition in the bill? Do they have a hidden agenda? We do not know. Do they have any studies to support the fact that this necessary? Why do they not leave this responsibility to the real professionals? Representatives from the Office of the Superintendent of Financial Institutions, who have always done excellent work, would be better qualified for this responsibility. Perhaps we are giving this veto power to the minister simply because the Prime Minister, as we all know, always likes to be in control of everything.

All these questions make us realize one thing: the Conservatives do not like studies. They believe they have the answers to all the problems and they pass legislation without any consultation or debate. In 1995, former finance minister Paul Martin introduced the Bank Act and saw it passed. That legislation was not sloppy or passed at the last minute. We spent a year preparing it before passing it. The Liberal government at the time held many consultations and put a committee in charge of the matter. Public consultations were held, and the Liberals listened to expert advice in order to ensure that the legislation was drafted properly.

The Liberal government of the day had a majority, as the Conservatives do today. Yet it did not impose legislation at the last minute or limit debate; instead, it listened to what parliamentarians and all Canadians had to say. This Liberal legislation saved our banks from the financial collapse of 2008. Now, we have barely two months to pass this bill. The problem is that parliamentarians are not necessarily experts in banking. We use banking services, but we are not experts. Consultations with people in the industry are needed, for instance, with people who receive and provide services, managers and others. And that takes time.

As I said earlier, is it really necessary to give the finance minister more power? Would another person or institution have been in a better position to make these decisions? Is there really a problem?

Since we are taking the time to tackle the question of banks, are there other aspects that we should also focus on, as we heard this morning? Is this the best solution for the problem? These are some of the basic questions that could have been answered with an in-depth study. The last time we reviewed the legislation on financial institutions, in 2006 and 2007, I was chair of the Standing Committee on Finance and we examined Bill C-37. Thanks to the hard work of the Liberal members on the committee, we led consultations that lasted over three months. That diligent work allowed us to find several flaws in the Conservative bill. It is hard to do the same work today.

As I said earlier, the main problem with this bill is not so much its content as the uncertainty surrounding its review, given that the government does not intend to consult the players involved. This problem could have easily been avoided had the government introduced this bill in October rather than in February since, I repeat, the bill must be passed before April 20. The House of Commons simply does not have the time to seriously consider this bill. Even in the Senate, Senator Hervieux-Payette stated that they simply did not have time to thoroughly examine the issue.

What were the Conservatives thinking when they introduced this bill in the Senate on November 23, 2011? The bill was read for the second time on December 6, 2011, just before the long Christmas break. Today, it is February 3 and the government is only now presenting the bill for second reading. Rather than wasting their time abolishing the firearms registry and rushing to pass regressive legislation to imprison our youth, why did the Conservatives not begin seriously reviewing the Bank Act? This is an urgent situation that needs to be resolved because, as I mentioned, the act must be revised before April 20. This should have been a priority but the Conservatives would rather invent threats than take care of real problems.

Another problematic aspect of this bill is the fact that the changes to this legislation would allow a foreign government to own shares in a Canadian bank and thus have voting rights. How does this help Canadian banks? We do not know. Taxpayers who have pension plans with banks do not even have the right to vote, so why should a foreign government? What will the effects of this be? I doubt that we will have an answer before this reformed legislation is passed because we do not have enough time to consider the consequences.

In summary, I am not against this bill but there are still some unresolved issues because this government took its time and did not adequately plan for this review of the Bank Act. A competent government, like the one that existed when the Liberals were in power, would have conducted many studies and allowed parliamentarians to carefully consider this bill. Now, there is not enough time and we will not know all the effects this bill will have until after it is passed.

[Réal Ménard, Bloc, Hochelaga, QC]

Actually, I know that this will certainly be discussed at the steering committee, but I would have liked a look at it first. Do my colleagues want to see a list of all the witnesses? When we discussed it with our leaders, we definitely said that we wanted the committee to concentrate its efforts on the contentious matters from the previous session, that is to say Bill C-27.

I would not want us, for example, to hear again from all the witnesses that we heard in the last session when we were discussing Bills C-10, C-22, C-32 and C-37. I would like us to spend more time on Bill C-27 that caused us difficulty. I wonder if all my colleagues are of the same mind, given that it is more or less what the leaders agreed among themselves when they were discussing the legislative committee.

Income Tax Amendments Act, 2006

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, to begin with, I would like to congratulate my colleague from Montmagny—L'Islet—Kamouraska—Rivière-du-Loup. His presentation was extremely clear. I will probably have the opportunity, in my own presentation, to substantiate even more what he just said. As he pointed out, the Bloc Québécois is in favour of Bill C-33, An Act to amend the Income Tax Act, including amendments in relation to foreign investment entities and non-resident trusts, and to provide for the bijural expression of the provisions of that Act. It corrects a number of things.

Again, this is somewhat like when I spoke to the changes to the excise tax. Sometimes, we debate in the House of rather casual subjects. This is far from Tintin in the Congo or Tintin in Tibet and even farther from The Crab with the Golden Claws or, for example, The Castafiore Emerald . This is not very sexy for a debate, but it is a necessary debate, just as the one on the excise tax. Bill C-33 corrects various provisions of the Income Tax Act which made it easy to circumvent tax rules and allowed tax evasion.

The bill responds to the shortcomings identified by the Auditor General in her November 2005 report. This bill will require disclosure of additional information about non-resident trusts, which will allow a more rigorous analysis of the figures submitted to the Canada Revenue Agency, in accordance with the recommendations of the Auditor General.

As my colleague has mentioned, tax evasion goes against the basic principles of horizontal and vertical fairness in the way we treat individuals. We must never forget that fairness is of paramount importance if we want people to have any trust in the tax system. This means fairness not only between individuals, but also between the different categories of individuals.

When the tax system is viewed as being unfair, there is also, unfortunately, a certain nonchalance in the public opinion about everything that relates to tax evasion. Working for pay under the table is a case in point. We absolutely need a tax system that not only is extremely fair, but that also has the appearance of being fair. Every time we can close a loophole and prevent people from believing that there is a double standard that benefits those who can afford those mechanisms, we have to do so. We were talking earlier about tax havens and about specialists and experts who can teach people how to avoid their collective responsibility.

It seems to me that we have to try and close those loopholes, and that is what this bill is doing. As I mentioned before, the Bloc Québécois will support Bill C-33.

Both the absence of fairness and the perceived absence thereof create a sense of laxity within the affected society. They also cause taxpayers to feel that they are being treated unfairly. As I said, practices that do not quite comply with the legislation are becoming more and more accepted and commonplace. Moreover, the government is losing revenue that, as my colleague said, must be made up for by higher taxes elsewhere, especially for the middle class, or by cuts to necessary public services.

As I said, we will support this bill even though it lacks that something special. It is definitely relevant, and as such, I think it deserves our attention even though it is not exactly a fun read.

I will provide a little background. In Canada, taxable revenue on trusts is calculated for individuals, not families. Here, income can be split among family members, resulting in major tax advantages. In fact, this is a common financial planning tactic among higher-income taxpayers.

They use family trusts to split income among as many family members as possible to take advantage of those family members' tax brackets. Obviously, when the income is split among many, some members of the family may have lower tax rates than if just one or two family members declare the income.

Canada's income tax system is based on a progressive tax rate structure. As such, individuals who have low or medium income pay less tax than high-income earners. As I just said, splitting income is one way to save taxes within a family or household.

To take advantage of this method, one must have a family trust. In addition to allowing income splitting, the trust can protect assets against the beneficiaries' creditors or ensure the use of an asset by a spouse until death before transferring the property rights to the children. The trust can also ensure that children have sufficient capital to cover the cost of tuition or living expenses while studying.

Even though trusts may seem to be an attractive way of avoiding tax, annual management fees can run to several thousand dollars. Once again, often it is the wealthy who are able to invest and who have enough money so that the advantages and disadvantages balance out and these trusts become attractive investment vehicles. Therefore, trusts are clearly investment vehicles that are available primarily to wealthy taxpayers.

In my opinion, on the whole, taxpayers do not appreciate income splitting, because it goes against one of the main principles of taxation policy: fairness. I mentioned this earlier. To comply with the principle of tax fairness, government gradually regulated the use of trusts and tried in various ways to reduce the benefits of income splitting.

The use of offshore trusts as investment vehicles has many advantages in terms of tax avoidance. Offshore trusts enable Canadian taxpayers to shelter assets from the tax system. Since Canadian tax authorities can have a very hard time obtaining information on investments in such vehicles, this opens the door to tax avoidance.

I remember that in a report—I think it was on the show Enjeux—journalists went to Barbados to locate companies such as the ones owned by the sons of the former Prime Minister, the member for LaSalle—Émard. The journalists were astonished to find that the headquarters of CSL International was not only a law office with four employees, but also the headquarters of about 100 other companies. Unfortunately, this information was not known previously, because it is not always easy to travel to conduct the necessary investigations. That is why it is important to have an easier way to obtain the necessary information.

In January 2000, the federal finance department introduced legislation to prohibit splitting with minors. People may not use children under 18 years of age, who are usually not yet working and therefore have no income of their own.

Under the attribution rules, capital gains on shares in the trust can be split, enabling the trustees to save on tax. Contrary to the attribution rules, this provision taxes the recipient of the split income at the top marginal rate, instead of reattributing the income to the transferor or lender.

However, the lack of clear legislation pertaining to foreign trusts created loopholes allowing the use of trusts established in foreign countries in order to continue to profit from the various advantages of income splitting. Moreover, the problems with information gathering—and I gave an example of that earlier—to establish the market value of assets of offshore trusts has facilitated tax evasion. In my opinion, it is important to remember that.

We also need to remember what the market value of assets is, that is, the highest price that would be agreed upon in a completely open and unrestricted market between fully-informed, knowledgeable and willing parties dealing at arm's length without constraint. This is the definition of fair market value. As I said earlier, it is a provision that was put in in that regard.

It was hard to establish the fair market value of offshore trusts. This value could be underestimated or the owners could find ways to ensure that the people at the Canada Revenue Agency had the impression that the value was lower.

Consequently, in a section of her 2005 report the Auditor General looked at the various loopholes found in the application of the Income Tax Act. She made a number of recommendations to close these loopholes with respect to the treatment of foreign investment trusts.

Of course, a ways and means motion was introduced on November 9, 2006. The Minister of Finance included this motion in Bill C-37 and its purpose is indeed to amend various rules concerning income tax. This ways and means motion had three main components.

First, the bill amends the Income Tax Act in order to clarify and specify the tax rules for non-resident trusts and foreign investment entities. Those provisions will allow the government to better regulate the use of those offshore investment vehicles by clearly establishing the foreign investment entities that may be exempt from taxation, the rules for ensuring that the foreign trust will be deemed to be resident in Canada and the investment vehicles to be taxed. The provisions will also specify how the attribution rules will apply when a foreign trust is deemed to be resident.

On that subject, I would remind the House that California, for instance, amended its legislation two or three years ago to ensure that, in the case of a company established in California and whose head office is in California, but that does business all over the world, revenue generated by that company must be included in the revenue of the head office. People saw this as strong action against tax avoidance and against tax havens. In fact, this has existed in Canada for a number of years. As a rule, a company whose head office is in Canada must pay taxes on all its revenue, regardless of whether it is generated in Canada or abroad, as long as there is no tax treaty, of course. If a tax treaty exists—we have such treaties with several countries—it is a matter of not taxing the same entity twice for the same revenue. This is completely understandable.

The problem I want to underline, and maybe I will be able to come back to it, is that when we have a tax convention like the one we have with Barbados, where the tax rate varies between 2.5% and 1%, this is a regressive tax instead of a progressive tax. The tax rate goes down as revenues go up. Of course these are only symbolic tax rates. Canada considers that revenues have been taxed a first time in Barbados and does not tax them a second time in Canada. When the tax rate of the foreign country is reasonable and comparable to the rates we have in Canada, tax conventions are totally acceptable. Unfortunately, when we deal with a country that does not have a real and transparent tax system but a system that is used only to allow taxpayers to avoid paying income tax in Canada, we do have a serious problem.

The second aspect relates to a number of general provisions in the Income Tax Act. I am still referring to the ways and means motion of November 9, 2006. First, it changes some general provisions of the act to ensure an efficient enforcement of the measures contained in the first part. The bill proposes a few changes to the Income Tax Act to include different measures in Bill C-28, A second Act to implement certain provisions of the budget tabled in Parliament on May 2, 2006. That is to say that the bill is modifying a previous bill that had already been introduced in this House. Some of the changes were suggested by the Canada Revenue Agency to clarify or facilitate the enforcement of measures included in the Income Tax Act.

The third and final component deals with the bijural aspect of the proposed amendments.

In other words, this last part adds or modifies expressions in the English and French versions in order to respect the semantics of civil law and common law. As we know, both apply in Quebec. This is inherent to the unique nature of the Quebec nation.

Let us now examine the individual parts of the bill resulting from the means and ways motion. The first part refers to changes to the rules that apply to non-resident trusts and foreign investment entities. A certain number of amendments and clarifications to section 94 establish the rules for taxation of non-resident trusts.

This part of the bill establishes and clarifies the rules regarding taxation of non-resident trusts. These clarifications and changes are made by amending article 94 of the Income Tax Act, as I already mentioned, which sets the tax rates for non-resident trusts.

As a general rule, a trust is subject to the Income Tax Act if it has received the transfer or loan of assets from an association, a joint venture, a trust, a fund, an organization, a natural person, a partnership or a financial syndicate resident in Canada. The non-resident trust must pay tax on income to the Government of Canada. If it does not, the beneficiaries are held responsible and must pay the amounts due. However, beneficiaries only pay their share of the tax on the trust. Additional relief is provided for beneficiaries who make a minimal contribution compared to other contributions to the trust.

The various changes proposed in this section of the bill amend the rules that apply to repatriation of moneys to Canada. More specifically, these rules define additional criteria for calculating the fair market value of assets. I have already mentioned the definition of fair market value for assets held by a non-resident trust.

Second, again in part 1, there are definitions of foreign trusts exempt from the Income Tax Act. This part of the bill specifies which type of trusts are eligible for tax exemption under the Income Tax Act. These measures will ensure that only trusts truly eligible for tax extensions could use this tax benefit. This will result in fairer tax treatment for everyone. Without going into too much detail, the following list indicates which trusts can be exempt and which trusts must pay tax.

Among the trusts eligible for exemption under the Income Tax Act, the exempt non-resident trusts, are trusts for beneficiaries with a mental infirmity who are not residents of Canada, and whose contributions to the trust are made to provide for the beneficiary's needs. This goes without saying.

Also exempt are trusts established after the breakdown of a marriage to provide for the children from the marriage who are under 21 years of age or under 31 years of age if they are enrolled full time at an educational institute, as well as charitable trusts, of course.

As far as the first exemption is concerned, I believe it is entirely consistent with what the Minister of Finance announced in his budget in February on the possibility of parents amassing, through a specific plan, money to provide for the needs of their severely handicapped children.

Resident trusts eligible for tax exemption are trusts for administering or providing pension benefits to employees, as well as charitable trusts.

Finally, the changes made to the Income Tax Act essentially mean that we have to ensure, quite simply, that the legislation as a whole is consistent.

In closing, Bill C-33 will ensure better application of the Income Tax Act.

The Bloc supports this bill to restrict the use of non-resident trusts as tax loopholes. This will allow us to maintain tax fairness—or improve it since it is not fair enough yet—and also show taxpayers in general that parliamentarians are interested in this and are concerned about their perception of fairness in the system. This will bring in a little more money for the good government.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Yes, Ms. Ransom, with respect to Bill C-37 you said that people would not be getting their cheques back. In fact, people do have the option of getting their cheques returned to them under the system.

[Susan Ransom]

You're right.

Now my clients--large and small business and individuals--are open to excessive amounts of fraud because all of these fraud features are taken off their cheques, as opposed to in the U.S., as I said, where they're expected to put them on. What do we do? They're going to charge extra fees now for the return of cheques, when that used to be included in your bank fees. You got your cheques back. Corporations got their cheques back. Now they're not going to be getting their cheques back.

What happens when there's a cheque scan and it's incorrect? We have no recourse built into Bill C-37, whereas in other jurisdictions they have built-in indemnities and warranties and the ability to get re-credits quickly and within a standardized process.

We need choice returned to consumers so they receive their cheques or scans. We need fraud features returned to the cheques. We need indemnity attached to scanned cheques. There are going to be large fees charged. ATM fees are nothing compared to what they're going to be charging for all the extra features that you'll have to implement in order to prevent fraud in your company. You'll have to go to positive pay, maybe at some banks as much as $1 a cheque.

Right now to view your scanned cheque online, just for my TD Bank account it's $1.50 per cheque per view. The Royal Bank, the last I heard, is $2.25 per cheque per view.

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

My time is limited, but Susan, you've raised a whole new issue for us. I don't think anybody's really quite grasped this yet. I think what you're trying to say is that with the changes in Bill C-37, we have now a system in place where we're opening up the possibilities for fraud to a great extent because there's no personal handling of cheques at all and there's been a mad rush to do electronic payments and cheque imaging.

What would you suggest we now do to try to fix this problem?

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

Thank you, Mr. Chairperson.

First of all, I think the point that Duff and others have made about the difficulty for us to proceed in a serious way without accurate information is a good one, and we need to find a way to get that audit done.

I should point out that after we lost the efforts to reduce and eliminate ATM fees, a motion was presented to this committee during consideration of Bill C-37 to at least get disclosure, full disclosure, of costs and fees. That was defeated. That was defeated at this committee, thanks to the Liberals' supporting the Conservatives, so we're at a real impasse here in terms of basic democracy and basic information. I don't know why there is this need to cover up. I don't know what we'll hear from the banks on Thursday, but this is where we're at.

In terms of the costs and the whole question of what's justified, I think the economists here--and Mr. O'Connell, and even Mr. Trigg and the Consumers' Association of Canada--should answer the fact that the costs have been identified. Perhaps they were not identified by the banks, but we had witnesses at this committee; I'll just put on record Dr. Lew Johnson's figures of, at maximum, a 60¢-per-transaction cost to the financial institution. He rolls in about a 30¢ fee, at the most, in terms of a transaction for the bank involved. He says the Interac fee or the switchback fee is 2¢ to 15¢ per transaction. You can add something for technology, add something for something else, and at most you are talking about a 60¢ cost per transaction.

Do you know what that means, Consumers' Association? It is over a 500% or 600% markup to consumers. Is that acceptable to you? You say it's the way it is and you're just going to accept it. I can tell you, you may hear from a certain number of constituents and people out there, but the vast number of Canadians are concerned that they're having to pay that kind of markup and pay that kind of cost when the banks are making the profits they are and exceeding their costs by 500% or 600%.

How do you justify that? How do you justify that? How, Mr. O'Connell, do you not say anything in the face of that kind of situation? How is it that it's not reasonable at this committee to talk about a more reasonable fee structure? What is the problem here? Whose interests are you trying to protect? Are the banks' interests that important--

Message from the Senate

[The Speaker, Liberal, Peter Milliken]

I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed the following bill:

Bill C-37, An Act to amend the law governing financial institutions and to provide for related and consequential matters.

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

Thank you, Mr. Chairperson.

Thank you very much for being here.

As you know, we had a considerable discussion on this whole area when dealing with Bill C-37, the changes to the Bank Act. We deferred to a later point recommendations from many groups on a complete overhaul and review of the area of electronic payments, because it is such a major issue for consumers.

I know the Canadian Payments Association is involved in terms of some guidelines and in trying to oversee this area. However, overall, it seems to me that this area is largely unregulated. As you said, it is based on voluntary support. You've talked just now about a code of ethics for electronic payments. It seems to me that we've gone way beyond that approach, and that we, as parliamentarians, need to be working on a legislative framework in this area.

I want to start by asking you about the recommendations that we've had from Option consommateurs, and also from CCI, the Canadian Consumer Initiative. Both of those organizations, and others as well, have documented serious problems with the electronic payments system. I'm going to refer to their study and information from back in the spring of 2006.

They commissioned a study that reported 900,000 pre-authorized debit problems in two years. They said it breaks down to about 1,000 mistakes each day. They identify the problems in terms of wrong amounts, wrong dates, or inadequate funds. I could go on and on, but I don't want to take up the time of the committee. I'm sure you know this study very well.

First of all, I'd like your comments on the study, on the problems at hand, and on whether or not you would support this committee going forward with a recommendation to the government that we work hard at developing a new legislative framework. Whether it's part of the Bank Act or separate makes no difference at this point. I think the question is how much we are going to start to come to grips with this ever-changing world.

Bank Act

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, I am pleased to speak on behalf of the Bloc Québécois about Bill C-37.

The Bloc recognizes that this bill has some merits. The Bloc also has some concerns about this bill. Bill C-37 will not address some issues. We have heard many speeches in this House. There are aberrations. There are excesses on the banks' part. This bill will not correct these excesses or aberrations. By aberrations, I mean the interest rates on credit cards issued by the major banks, among other things.

I have been a member of the House of Commons since 2000. Believe it or not, although the Bank of Canada rate has occasionally gone down, it has risen slightly in the past few years. Still, it has never gone above the level it reached in 2000.

The interest rate on credit cards issued by the major banks and other financial institutions has risen by 6% since 2000. Obviously, people who pay their credit card bills before the deadline do not have to pay these significant charges. But people who, for various reasons, are having trouble making ends meet and do not make their payments by the deadline will have to pay interest.

Costs are going up in Quebec. The Charest government has raised hydro rates. It was cold in February, so people will notice an increase on their next bill. They will see how much their rates have gone up in the past two years—nearly 15%. Sometimes, we see sharp increases. I say “sharp increases”, because in the past two years, we have enjoyed relatively mild weather in January and February, but this year has been cold.

Citizens will see on their next bill, which will arrive in March, probably a little before the election date, the real increases in charges and costs that the Charest government will have had added on to their hydro bill. Then they may have to use their credit cards to pay their hydro bill. It is hard, especially when the rates charged by the credit cards issued by the big banks are getting close to 20%, with rates such as 19.9%, 18.9%. Not to mention the department stores whose interest rates may be as high as 24% or 25%.

Bill C-37 will not fix these aberrations, no more than it will fix the high bank fees for ATMs.

For some time now, when someone is the client of a bank and they use one of its ATMs, no fees have been charged. But if someone uses another financial institution’s ATM, there is a fee charged. The ATM that took your request charged you a fee, but the financial institution did not. For the past few years, when someone uses a competitor’s ATM, they are charged fees by their own bank for using a competitor’s ATM.

In the late 1990s and early 2000s, the banks streamlined their service centres. So today we are paying for the closures of points of service. Well established banks closed their client services saying that ATMs would replace them. On top of their being replaced, fewer services are offered and fees have been added.

Banks have disappeared from certain areas. In rural areas, in some communities, branches have been closed and moved to a neighbouring town. This is what happened in my community. We have an independent ATM, one that belongs to an independent company.

The bank that used to offer services to the population now charges us fees on top of those taken by the competitor’s ATM. In some communities, points of service have closed their doors. The institutions suggested that their clients use the ATM, claiming it would not cost them anything and would be cheaper. In addition to saving themselves money, they take our money away from us. Such is the banking reality. This is not something that will be fixed by Bill C-37.

Bill C-37 takes a somewhat broader approach, that is, it looks at broader banking strategy. Among other things, it will reduce the regulatory burden on foreign banks, credit unions and insurance companies, thereby making the regulatory approval regime more efficient. Furthermore, the government would increase the equity threshold from $1 billion to $2 billion, thereby making it possible for a single shareholder to wholly own a bank, thus encouraging new competitors on the market.

Once again, this is not targeted at small investors, as I was saying earlier. Bill C-37 is targeted more at bank administration. Although the Bloc Québécois supports the principle of Bill C-37, that is, to open the market to greater competition, we believe that it may allow for more service centres and therefore possibly fewer fees. However, we must ask ourselves some important questions. This is what my colleagues of the Bloc Québécois will do within the committee that is tasked with examining this bill. We will make certain that any changes to the regulations do not allow the kind of uncontrolled mergers and acquisitions we have seen before in the banking sector.

We will try to ensure that the purpose of Bill C-37, which is to promote competition and not concentration among the banks, is respected. The Bloc Québécois' goal is not to support legislation whose purpose is to ensure fewer banks. Indeed, what we want to ensure is greater competition. We want to open up the market and allow more major players in the field, in order to have more competition and more services. We do not want to see the opposite.

We hope that our colleagues in the other parties will understand the position taken by the Bloc Québécois. We want a more open system. We do not want concentration or the kind of uncontrolled mergers and acquisitions we saw in the early years of this century. At that time, the banks were determined to become major global players, to the point that ultimately the public was no longer getting service. For the big banks, this was not a problem as long as they were able to go and do business with the big players all over the world and finance the big capitalists of the world. It is easier to do business with one than with one million. Obviously, I can understand the bank president. I hope that he will understand me. Me, I work for the people. I am sorry but what I want is for the people to have service. If the bank president only wants to have to buy one dinner, that is his problem. I hope that one day he will have to buy a million dinners to do business with every member of the public, as we do, as the Bloc Québécois members of this House do, when we go out to meet with the public in the street. I hope that the bank president is going to come down from his tower from time to time and go and see what the people have to endure and live with.

So it is with that goal, that objective in mind that the Bloc Québécois will support this bill. It will support the bill on the condition that there be more service to the public, not less.

You have gathered that Bloc Québécois members will be following Bill C-37. We will be in committee to propose amendments so that we have more players in the banking game, hoping that with this bill we will succeed in reducing fees and making services more accessible to the public, at a better price. Too often, the public has to endure increases, as is the case in Quebec at present with the rise in electricity rates that is coming in March because of the Charest government.

We hope that we will be able to offer a little salve for their wounds by trying to reduce banking fees.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Speaker, the member made a lot of comments and I am not sure how many questions he asked but I will try to answer him as best I can.

If the hon. member had asked me the question about bank closures a couple of years ago I would have agreed with him. I am not about to defend banks but in the last couple of years there has actually been an increase in bank openings in my riding. They have actually increased the number of hours.

We have Caisse Populaires in Quebec. Credit unions would be the equivalent. The Caisse Populaires have put together a great network of banking systems which have enabled them to compete against banks. This has the banks worried. We are receiving a lot of services in my riding.

I have gotten to know some of the regional managers in my area and when I hear a complaint I tell them about it and tell them that I do not like what I am hearing. We have had problems with some of the banks in terms of banking with individuals and businesses and we have been able to rectify those problems. We also have a very competitive BDC bank that is doing a lot of good work in my riding. I disagree with the member in that aspect.

We do not have payday lenders in my riding but a lot of cash-chequing services are sprouting up, and that worries me a bit. We do not have pawnshops but we have something similar and I do not like what I am seeing. The problems and issues are there.

We addressed that issue in the finance committee during our deliberations on Bill C-37. I want to remind the member that we were just looking at the statutory five year review of the Bank Act so it did not really fit in. We tried to fit in certain amendments to address bank closures. We requested the banking association to provide us with an analysis of the different branches and banks that closed during the year. We asked for this by geographical location and the reasons behind the closure. We hope to get that information. If not, we can always bring bank officials back before committee. They will be appearing before committee for ATM fees and the way the whole system works for electronic payment services.