Mr. Speaker, I would like to start off by responding to the hon. member for Fort McMurray—Athabasca. In light of the events we are currently seeing, he should not be so confident because he might be disappointed in the next election if he ends up in the opposition.
I would like to speak to Bill C-28 as the deputy critic for consumer protection. I would first like to criticize the parliamentary manoeuvre that we have just witnessed, which sought, once again, to reduce the time allotted to the opposition members so that they do not have an opportunity to point out the shortcomings and flaws in the bill. The Conservatives use this method constantly, and it is our duty to denounce it.
This bill has a number of obvious flaws. The first one that jumps out is that the financial literacy leader will not be required to be bilingual. Being bilingual does not just mean knowing a few words in French or being able to read a few documents in French. Being bilingual also means being able to explain provisions, to present choices, to listen and to meet with people across Canada, especially in provinces with francophones, not just Quebeckers.
Hon. members from Quebec and from other francophone regions in Canada and I myself, as the member for Saint-Jean, want first to know where in the bill is the provision that ensures that the financial literacy leader is capable of communicating in both languages correctly, using decent French, and is capable of putting himself at the level of the people he intends to serve.
Above all, I do not want to hear the government say that we should not worry because, once he is appointed, the leader will take French courses, which is what we have been hearing over the past few months in the House. The government claims that it is possible to learn French and that there is no need to worry. No. That is not true. It takes years, it takes skills and a will to learn a foreign language. So that is an obvious flaw in the bill. That goes against the bilingualism requirements of this country and against Canada's will to stay bilingual and able to serve all its people in both official languages.
Now, let us talk a bit about financial literacy programs. Their goals are often criticized. We know that, more often than not, these programs are not intended to give consumers the tools that will enable them to pay fewer fees and have more control over their expenses. Instead, they are used by large financial institutions—banks and insurance companies—to gain more clients who will spend more money.
One of the things that should grab our attention about the famous task force on financial literacy is who is on it. It has 13 members. Don Stewart, the CEO of Sun Life Financial, is the chair of the group, and his vice-chair is Jacques Ménard, the chairman of BMO Nesbitt Burns and the president of BMO Financial Group Quebec. The very make-up of this task force should give us an indication of its objectives. The recommendations clearly show that they are basically designed to help financial institutions boost their clientele, obtain more clients. They do not aim to give consumers the ability to manage their money better and save by using what banks or financial organizations have to offer.
This is an important element. This is the make-up of the famous task force. Beyond that are the recommendations. This task force issued 30 recommendations, from which the government has plucked only one. The only one it took was the first, which involves appointing a financial literacy leader. It is too bad, because the second recommendation was much more worthwhile. It focused on creating a task force, an advisory board, that would give the leader direction and would have control over the actions of this financial literacy leader. So the task force would lend the financial literacy leader greater legitimacy because he would be accountable. This is an important part that this government ignored, intentionally in my opinion, because it is the second recommendation. It is not some subsidiary recommendation tucked away at the end of the document; it is truly the second recommendation.
Another aspect of this legislation is that it attempts to lay a guilt trip on consumers by claiming that they are not competent enough to properly manage their money. But it is absurd to try and educate consumers about how to save money when they do not have any. That is the main problem: consumers, currently, do not have money and, therefore, do not have the ability to save. They can be taught as many strategies as possible, but when the average family is indebted to the tune of over 150% of their income, in other words, the equivalent of half of their income in debt, how can this family of average consumers save money when they do not even have the means to pay off their debts? What is most striking about this legislation is that it does not deal with the problem, but with the consequence, the consequence being that now that consumers are in debt, we are going to explain to them how to avoid going further into debt.
A French comedian once said: “Write to us and tell us what you need, and we will explain to you how to make do without it.” That is this government's logic: do not create ways to help consumers; instead, explain to them, after the fact, how to get out of their predicament.
Another very interesting aspect of this report is that it confuses a complement and a substitute. Indeed, what we call financial literacy, which is also known as “financial education” or “financial knowledge”, must complement any government measures to assist consumers. It must not be a substitute.
A very interesting report was published in 2009 by the OECD and is entitled “Financial Literacy and Consumer Protection: Overlooked Aspects of the Crisis”. This report was prepared by the OECD following the financial crisis in order to demonstrate that the fact that consumers had started to use increasingly complex financial mechanisms that they did not understand jeopardized not only consumers' financial security, but the financial security of the whole system. Moreover, this very interesting report states that some recent financial innovations are incomprehensible not only to consumers, but also to bankers themselves.
One of the things mentioned was floating interest rate loans. When the time comes to choose between a floating rate and a fixed rate loan, most consumers are unable to understand the difference between them and how their choice will affect their future indebtedness. And yet, they are the ones who make the choice.
Subprime mortgage loans were what caused a crisis that had never been seen before, mainly in the United States. Why? Because consumers were given the opportunity to get involved in innovative mechanisms that were different from traditional financing mechanisms. The end result was that their own financial health as consumers was endangered, as well as the financial health of the whole system. As it happens, the whole system collapsed because some little financial geniuses devised instruments that are very difficult to understand.
If most people who work in the field of finance cannot understand them, how can the average consumer avoid being confused? The very interesting OECD report stated that most consumers greatly overestimate their financial skills. Here is a personal example. In a previous life, I was in charge of a team that conducted social population surveys for Statistics Canada. One of the projects was to evaluate the literacy and numeracy of the people being surveyed.
The results of these surveys were disastrous. Not only that, but what does not show clearly in these studies is that most people who are unable to respond will not respond, because they are ashamed. Quite simply, people who are unable to add or subtract will not participate in these studies. This means that the pool of respondents is biased from the very outset. When the sample is biased at the outset because those who are not capable of responding are ashamed of taking part in the study, then the results clearly do not reflect just how disastrously uninformed most consumers are.
This proposal is meaningless not because it would be impossible to do something worthwhile with it, but because the government has decided to blame indebtedness on consumers, households and families who find themselves unable to control their spending because they do not have enough money, rather than take action that would truly enable consumers to first get themselves out of debt and perhaps then set money aside for the future.
Unlike the Conservatives, who think that education and financial literacy are substitutes for programs, the NDP proposed concrete measures in our election platform in May 2011. For instance, we proposed—and it was our leader, the late Jack Layton, who drew attention to this—capping interest rates at 5% above prime, which is based on the Bank of Canada's key interest rate. The NDP proposed this concrete measure, which would give all Canadian families who are struggling with record debt levels—that is what Statistics Canada is reporting—a little breathing room and hope that they will one day get out of debt.
One interesting thing that came out of the 30 recommendations in the task force's report was this: “the Government of Canada...integrate a financial literacy component into the Canada student loans program for students receiving funding.” Helping students, most of whom have a lot of debt, would be very beneficial. This report recommends that the Government of Canada integrate programs, concrete measures to help students manage and deal with their level of debt, which can be huge. That is recommendation number 10 in the report. But where is that recommendation in the bill before us today? It is missing. Why is the government ignoring things that could help change the lives of consumers?
Instead, the Conservatives prefer to create a very well-paid executive position, but they will not even give that individual an advisory board to make recommendations and give the position some legitimacy. Of the 30 recommendations, the Conservatives took only one, and they drafted a bill that is nothing but a smokescreen. That is how I would describe it.
In closing, the NDP will not be supporting this bill, because we believe we can do better. The resources that resulted from the deliberations of the task force—even though it seems to favour the financial institutions—could be put to better use. We cannot support this bill today.
