Bill S-5 (Historical)

Financial System Review Act

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 reinforcing stability and fine-tuning the consumer-protection framework; and
(b) 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 Canada Deposit Insurance Corporation Act, the Canadian Payments Act, the Winding-up and Restructuring Act, the Office of the Superintendent of Financial Institutions Act, the Payment Clearing and Settlement Act and the Financial Consumer Agency of Canada Act.

Financial System Review Act

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I guess I might have spent a bit too much time at the beginning of my comments trying to clarify the record. I genuinely believe that, in reviewing and listening to a lot of the debate of the bill, individuals like Paul Martin, the former minister of finance, and Jean Chrétien did protect the industry by ensuring we had those regulations in place.

My concern was not as much as trying to assume credit for those two individuals, but rather that we do not try to rewrite history when others members stand and try to assume the credit when it is not true.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I appreciate my hon. colleague's speech today. I also appreciate the intervention by the hon. member for Saanich—Gulf Islands in relation to Mr. Martin, who certainly played a very important role in maintaining the independence of our banks and maintaining banking regulation. I was a member of Parliament at that time. I can tell her that in fact Liberal MPs were overwhelmingly against the idea, and I want my hon. colleague from Dartmouth—Cole Harbour to hear this, of deregulation of banks or of mergers of banks.

It concerns me because the New Democrats came to Ottawa after last May, saying that they were going be different, with a different approach to Parliament. The NDP put on that coat, or perhaps the new beard, but it is the same old face sometimes. Those members are trying to carry on with this myth that there is no difference between the Conservatives and the Liberals.

On this issue, it would be more reasonable and more in keeping with the coat they are trying to put on if the New Democrats would actually give credit where it is due and admit that on this issue there is a huge difference with the Liberal government. Liberal MPs overwhelmingly insisted that we maintain independent banks, maintain non-merged banks and regulation of banks and that the 40-year mortgage, for example, which the Conservatives brought in, was a disaster.

However, I am going to give the NDP credit for participating with the Liberals during the minority governments, ensuring the Conservative government did not deregulate, as it would have liked to have done.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is nice that we have virtually unanimous support that the regulations in place during the 1990s are in essence what saved our banking industry, to the degree that it is now the envy of the world. All members recognize that, although it might have taken some a little longer to accept.

At the end of the day, we will have some issues which we will all agree on, and some not. There will be some issues the Liberals will not support, such as increasing the number of members of Parliament from 308 to 338. The NDP is in agreement with the Conservatives in wanting to increase the size of the House of Commons. Sometimes there is a crazy mixture of agreement. This time around, it is nice to see that all of us support a regulated banking industry.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, one thing I will not try to do is rewrite history. I will agree the reason we have a sound financial system is not because of the Conservatives and because of the regulations that were put in place by the previous government.

One thing was of interest to me. My colleague mentioned he supports consumers in terms of banking, and mentioned credit cards. I wonder if he agrees with the NDP proposal, that was part of our campaign, to cap the credit card rate?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I do not want to proclaim that I know all the answers. However, I do know a lot of the issues. One of the issues that I believe many Canadians, including myself, share, is a concern about the amount of banking fees and the level of interest rates. I believe Canadians want us to deal with these.

I can assure the member that all political parties will at some point make it very clear what they would like to do. I would like to think that I am with my constituents, the consumers, on the issue. I want to wait and see what ultimately happens. However, something needs to be taking place.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, I want to share my colleague's comments that it is really a stretch to watch the Conservative government stand in the House and claim credit for the banking industry's strength over the last recession. It was the Conservative Party members in the 1990s who pushed for deregulation, bank mergers and the ability of banks to sell other financial products. It was resistance to those pushes that caused our banking system to be strong today.

I must say to the Liberal Party though, that the fact there was a debate at all in the 1990s reflects the schizophrenic quality of the Liberal Party. We never really know where it stands. People in the Liberal Party were pushing for those same things. I will give the Liberal Party credit at the end of the day. It resisted those urges, but there were many members, including John Manley and other famous Liberals, who were pushing just as hard as the Conservatives.

That is why the Liberal Party has gone from 172 seats in 2001 to 135 seats to 77 seats to 34 seats over the last 10 years. Canadians never really know where the Liberal Party stands on an issue. It said it would bring in a national child care program. It did not. It said it would bring in a national housing program. It did not. It is this schizophrenic quality that has Canadians quite rightly concerned about the Liberal Party.

Maybe my friend could address the fact that Canadians do not seem to know whether Liberals are on the right side or the left side of the spectrum and that is why it finds itself with 34 seats today.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the member did make a fair comment in regard to the Conservatives. However, it was the Reform and Canadian Alliance, from which many Conservatives originate. Many would say a vast majority of them would have advocated for deregulation. I am glad they have changed their minds since then.

In regard to the other issue, I can assure the member, when he makes reference to the child care program, which was a Liberal Party commitment, had the NDP supported the Liberals we would have had that in place. It was part of the budget. Unfortunately, because the NDP worked with the Conservatives and defeated the Liberals, we lost that particular issue.

However, I can assure the member that, on issues such as old age pensions and all those good social programs, it was a Liberal administration that brought them through.

[The Acting Speaker, Bruce Stanton]

Resuming debate. Before I recognize the member for Brossard—La Prairie, I will just remind him that at 5:30 p.m. we will come to the end of government orders, so he may want to take that into consideration. The hon. member for Brossard—La Prairie.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, I am rising today to speak on Bill S-5.

We have had some good debates today. At the finance committee, we had the chance to look at the bill. One of the first things that we realized was that we did not have much time to actually study the bill. As members know, the bill came from the Senate. Members know we are trying to abolish the Senate, but that is not the issue. The issue was the fact that the study was done very quickly. There were approximately 30 emails or briefs sent through the website. That was pretty much it.

We are talking about the bill, and how every five years we have to look at the financial institutions and banks. Within the last five years there was a global financial crisis. We have talked about sub-primes and paper-backed products. There was a crisis in the U.S. and there was a crisis here. There are some arguments about why we survived the crisis. As I mentioned, it was not because of the Conservatives. It was because of the previous government that had sound financial regulations.

My problem is that, within the last five years, we could have looked at what was happening in the U.S. and overseas, and at what is happening here. Instead, we have a small bill that looks at technical issues. However, there are issues that are taken care of, and that is why we will be supporting Bill S-5.

What we are saying is that we missed an opportunity. What we do not like in the bill, and this was raised in committee, is the fact that we are giving all the power for approving the purchase of foreign banks by Canadians banks to the minister. The Minister of State for Finance came to committee and explained the bill. The response was not good enough.

The way the system is working right now, the Office of the Superintendent of Financial Institutions looks at transactions and gives a recommendation on whether or not to approve the merger or acquisition. Now the minister will have the final say. Even in a case where the Office of the Superintendent of Financial Institutions says that it is not good for Canadian institutions, the minister can say, “We do not mind. Just go ahead and move forward with that transaction.”

That is of concern for us, especially knowing that a lot of the ministers, as we see with the Minister of Industry, have conflicts of interest. There may be a problem in terms of judgment. In this case, there may be some problems with the minister being too close to financial institutions. That is a big concern that we raised. Unfortunately the government did not answer it.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Mr. Speaker, I would like to thank my colleague from Brossard—La Prairie for his excellent speech.

My colleague did a very good job of explaining what we like about this bill. However, I would also like him to comment further on what is not in the bill but should have been in the bill to make it comprehensive: regulations governing financial institutions and big Canadian banks. Neither Canadian families nor the middle class will benefit from this bill, which was introduced in the Senate. Only the big banks and Conservative Party cronies will benefit.

I would like to know what the member thinks about measures that could have helped Canadian and Quebec families in a tangible way but that are not in the bill.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, I thank my colleague from Chicoutimi—Le Fjord for his question.

We would have liked to see measures in the bill that would really help consumers, but the bill contains no such measures. The NDP proposed caps on excessive credit card interest rates. That is one example of what the government could have done. The government also failed to regulate banking fees.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I would like to thank the member for Brossard—La Prairie.

My question is simple. I completely agree that the government missed an opportunity with this bill.

If we had a chance to do it again, what does the member think is the number one thing that would improve our banking system from the point of view of consumers: banking fees, greater transparency or both?

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, it would be both. However, one thing New Democrats have clearly proposed was to put a cap on credit card fees.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, could my friend comment on what he thinks about other banking fees? I appreciate that the NDP wants to put a cap on the level of interest. Could he provide some sort of an idea of the kind of cap he is referring to? Is he saying it should be a 10% or 15% cap? What percentage cap would he like to see put on credit cards?

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Speaker, we want to look at sub-prime plus a percentage cap.