Mr. Speaker, I welcome this opportunity to speak to Bill S-5, the financial system review act at third reading. This bill would reinforce stability in Canada's financial sector, fine-tune the consumer protection framework and adjust the regulatory framework to new developments.
Since the onset of the global financial crisis of 2008, our government has remained committed to strengthening the framework overseeing the financial sector. Our focus has been to provide the best consumer protection environment possible, one in which there is competition, information is disclosed and consumers are able to make informed choices. Bill S-5 does just that.
Bill S-5 proposes to improve the consumer protection framework by enhancing the supervisory powers of the Financial Consumer Agency of Canada, FCAC. FCAC is mandated with ensuring that federally regulated financial institutions adhere to the consumer provisions of the legislation set out to govern them. In addition, FCAC is the government's lead agency on financial education and literacy. It has moved forward with an array of excellent initiatives in recent years. FCAC has developed innovative tools to help Canadian consumers, such as a mortgage calculator that quickly determines mortgage payments and the potential savings resulting from early payments.
FCAC has also been instrumental in leveraging and coordinating private sector and voluntary sector initiatives on financial literacy already under way across Canada. Financial literacy among Canadians will pay dividends for future generations. That is why, in budget 2009, we established the task force on financial literacy, to make recommendations on a cohesive national strategy to improve financial literacy in Canada.
The task force had 13 members drawn from the business and education sectors, community organizations and academia. The task force delivered its final report, “Canadians and Their Money: Building a brighter financial future”, on February 9, 2011. It outlined 30 recommendations to improve the financial literacy of Canadians. I am pleased to note that the proposed financial literacy leader legislation before Parliament now responds to a key task force recommendation for the need for dedicated leadership. That legislation, as the name suggests, would provide the framework for the appointment of a financial literacy leader. This financial literacy leader would be mandated to work with stakeholders to support financial literacy initiatives and would continue the progress achieved by the Financial Consumer Agency of Canada.
Informed consumers are the very foundation of a solid financial system. Indeed, a country's prosperity is ultimately the sum of the financial successes and related decisions of all its households. However, we have done more.
In 2009, our government acted to protect Canadians who use credit cards. We want to ensure that Canadians understand their obligations in advance of signing up for and using these purchasing instruments. To that end, the measures we introduced, which are in effect today, mandated clear and simple information on credit card application forms and contracts, and clear and timely advance notice of changes in rates and fees. This initiative provides Canadian consumers with precisely the kind of improved financial information that leads to better decision making.
Also, to protect consumers, in August 2010, we put into effect the code of conduct for the credit and debit card industry. The code was developed in consultation with small business. Under the code, merchants will be provided with clear information regarding fees and rates, given advance notice of any new fees and fee increases, able to cancel contracts without penalty should fees rise or new fees be introduced, and given new tools to promote competition and in particular the freedom to accept credit payments from a particular network without the obligation to accept debit payments and vice versa.
This code has been widely applauded, especially among small business. I will quote at length what the Canadian Federation of Independent Business had to say. It stated:
The Code of Conduct's biggest achievement has been to protect Canada's low-cost flat-fee debit system.... the Code's other big accomplishment is providing merchants with some power in their relationship with credit card companies, banks and card processing companies.
Merchants have new powers under the Code that have helped them achieve tangible results in their dealings with the industry. This simply wouldn't have happened without the Code.
I encourage all members to take the time to review the code and discover how it will contribute to a better system for both merchants and consumers. Before I conclude, let me very quickly highlight some of the other measures in today's legislation which, I believe, other speakers will address in greater detail.
Bill S-5would update financial institution legislation to promote financial stability and ensure Canada's financial institutions continue to operate in a competitive, efficient and stable environment. It would improve the ability of regulators to share information officially with international counterparts. It would change the priority status of segregated fund policies in insolvency situations that would facilitate timely transfer, consistent with life and health insurance policies. It would clarify that Canadians are able to cash government cheques under $1,500 free of charge at any bank in Canada. It would promote competition and innovation by enabling co-operative credit associations to provide technology services to a broader market. It would amend the Payment Clearing and Settlement Act to remove the requirement that there must be at least one bank involved.
In all, the measures proposed by the bill would further strengthen our system by reinforcing stability in the financial sector, fine-tuning the consumer protection framework and adjusting the regulatory framework to adapt to new developments.
Canadians should be justifiably proud of our financial services sector. It employs over 750,000 in good, well-paying jobs. It represents about 7% of Canada's GDP. It is a world leader in the use of information technology.
Over the past four years, the World Economic Forum has ranked our banking system as the soundest in the world. Forbes magazine has ranked Canada number one in its annual review of the best countries to do business. Five Canadian financial institutions were named to Bloomberg's most recent list of the world's strongest banks, more than any other country.
Recently, a Financial Stability Board peer review praised the government's response to the global financial crisis. It highlighted the resilience of Canada's financial system, calling it a model for other countries. The FSB review said that “the strength of Canada's economy and its financial system meant that no Canadian financial institution failed or required government support in the form of a capital injection or debt guarantees during the global financial crisis.”
By updating the financial legislation framework, we would continue to ensure that Canada's financial institutions operate in a competitive, efficient and stable environment that would help Canada maintain its well-earned reputation as a global leader in financial services.
Mr. Speaker, thank you for the time I was given to participate in today's debate and to recommend the timely passage of Bill S-5.