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.

The House proceeded to the consideration of Bill S-5, An Act to amend the law governing financial institutions and to provide for related and consequential matters, as reported (without amendment) from the committee.

Speaker's Ruling

[The Deputy Speaker, Denise Savoie]

There is one motion in amendment standing on the notice paper for the report stage of Bill S-5. Motion No. 1 will be debated and voted upon.

I shall now propose Motion No. 1 to the House.

Motion in Amendment

[Peter Julian, NDP, Burnaby—New Westminster, BC]

moved:

Motion No. 1

That Bill S-5 be amended by deleting Clause 212.

Madam Speaker, I am pleased to rise in the House to talk about our amendment, which seeks to delete clause 212 of Bill S-5, which reads:

The Superintendent, any Deputy Superintendent, any officer or employee of the Office or any person acting under the direction of the Superintendent, is not a compellable witness in any civil proceedings in respect of any matter coming to their knowledge as a result of exercising any of their powers or performing any of their duties or functions under this Act or the Acts listed in the schedule.

This clause is a concern for us. This aspect of the bill gives the institution immunity with regard to the transparency of its decisions. This is something that affects us and with which we disagree.

When we talk about Bill S-5 in its ensemble, I would like to say that the NDP is supportive of Bill S-5 and will be voting in favour of the bill. However, I would like to mention our concerns about the process regarding the bill and the results that are before us today.

The government is obliged to make revisions to the Bank Act and revisions to financial institutions on a regular interval. It is very important for the government to actually look at the situation of the banking industry in our country, look at its impacts on ordinary families and to hold a broad degree of public hearings to come forward with a bill that provides those substantial revisions to the Bank Act while protecting the fundamental stability of our financial institutions. The government has failed to do that.

The NDP has been the foremost advocate of maintaining strong and rigorous financial accountability around our banking system. Members will recall the many times when the previous Liberal government and the current Conservative government talked about weakening those regulations we ensured that we had rigorous accounting within our banking system. It has always been the NDP that has stood foremost for stability in our banking sector and ensuring at the same time that there are rigorous regulations that apply.

It is because of the defence that the NDP has mounted in the House of Commons that we continue to have stability in our financial institutions. When we compare it to some of the others around the world, when we look at what happened in Iceland and the meltdown that occurred in the United States, we can understand the risk that comes when the government moves to reduce regulation in our banking sector.

We certainly are the strongest proponents in the House of having rigorous regulation governing our banking sector. Anyone on the other side who doubts that only need look at Hansard over the past few decades to see that tradition which we have established in Parliament.

We also believe in protecting the public interest and the interests of ordinary families. The way Bill S-5 was brought forward, the fact that very few were even aware that these revisions to the Bank Act were taking place, the fact that the bill originated in the Senate, that it was brought forward in the House at a late time and had to be adopted in April did not allow for rigorous analysis of our current banking sector. That simply did not happen.

The finance committee did have some hearings. I want to get back to some of the comments that were raised in the few hearings the finance committee had on the subject. However, the reality is, when a bill is brought forward at a late date, when the deadline is a fixed date in April when the bill has to be adopted, although the NDP has co-operated, we have raised concerns about how remarkably late and how few public hearings could be held into what is such an important matter. Some of the witnesses who appeared before finance committee raised these issues as well.

The coordinator of the Canadian Community Reinvestment Coalition flagged the fact that with record first quarter profits we have seen in the banking industry, banking profits are up 5.3% compared with 2011. These profits have occurred while raising bank fees and cutting jobs in the sector. The coordinator of the Canadian Community Reinvestment Coalition also said that past government actions have been ineffective in ensuring Canada's big banks are not making excessive profits from gouging customers, cutting services and failing to lend to job-creating Canadian businesses. This view was also shared by Option consommateurs in Quebec. Jean-François Vinet said that the bill does nothing to protect consumers from criminally high interest rates on credit cards.

This is why we object to how the government has brought this bill forward at a late date, in a scattered fashion, without any real intent to get public feedback on revisions to the Bank Act.

It is the end of March and this bill needs to be adopted within a few weeks' time, and yet, there are issues around how ordinary families are impacted by the Bank Act and by the government's failure to take action. We feel that is profoundly unfortunate.

We are not talking about a situation that is unimportant. Under the Conservative government, we see that Canadian families are experiencing a record level of household debt, a level of debt that we have never seen in our entire history. People might say that Tory times are tough times. It is very true that under the Conservative government, Canadians are poorer, when we look at the high debt levels and the real wage reduction that Canadians have experienced over the last year or two.

It is a matter of broad concern to us that while Canadian families are struggling under a record level of debt, the government did not choose to bring forward in a public way revisions to the Bank Act to allow Canadians to have their say on what is happening with the current structure of the Bank Act and financial institutions and how current levels of high interest rates are impacting them.

Bank of Canada Governor Mark Carney warned that the ratio of debt to income will rise within Canada from an already alarming record 153% that was reached last year. Many think it will approach the landmark 160% hit by the United States before the United States tipped into crisis more than three years ago.

We are talking about a crisis level in household debt. We are talking about a crisis level in how Canadian families that we represent in communities across the country from coast to coast to coast are coping with these record debt loads. A not unimportant element of those record debt loads is the high interest rates that are charged by the financial institutions.

Bill S-5 originated in the Senate and was brought to the House of Commons at a late date and after very little public input. The finance committee was not allowed to conduct the kind of public hearings that could lead to changes in the Bank Act. As the few consumer representatives that were able to come before the finance committee stated very clearly, nothing in the revisions contained within the bill deals with the fundamental questions that we have been raising in the House on what Canadians are feeling form coast to coast.

Every single member of the NDP caucus is acutely aware of the crisis levels of household debt. We have raised the issue in the House, and yet the government does not seem to think it is important. These record levels of household debt, unparalleled in our history, that Canadian families are experiencing seem for the Conservatives to be a normal manner of living.

Given the profound job loss that has been experienced over the past few months, the tens of thousands of jobs lost and the reduction in real wages that Canadian families have experienced, we think that the government should be looking to help Canadian families.

We brought forward a series of amendments in committee to address some of the issues that we felt were not being addressed by the process around Bill S-5. I have already mentioned the lack of public input, the late date at which the entire process was begun, the late date by which the government brought the bill from the Senate to the House of Commons, allowing for scant debate.

Understanding as we all do that there is a fixed deadline when the bill has to be passed, we endeavoured to bring forward a series of amendments. Every single one of those amendments was refused by the Conservative government. We think the Bank Act revisions should be treating Canadian families—

[The Deputy Speaker, Denise Savoie]

Order. Questions and comments. The hon. member for Winnipeg North.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, I found the member's comments somewhat interesting as he tried to portray the NDP as some sort of saviour of the banking industry. We all know that is not quite true. I can appreciate that many New Democratic MPs want to be Liberals; they just do not want to proclaim themselves as Liberals.

Having said that, I am wondering if my colleague recognizes that the banking industry in Canada in comparison to other countries around the world is doing exceptionally well. There is no doubt about that. However, those regulations were put into place by individuals like Jean Chrétien and Paul Martin. They are the ones who built the banking industry to the degree that it is envied around the world. Instead of trying to rewrite history, would the member acknowledge that it was in fact Liberal Party administrations that built the system we have today, which is the envy of the world? That is the reality.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Madam Speaker, the member is new to the House and I am going to give him the benefit of the doubt because he obviously was not in the House of Commons when the former Liberal government pushed to deregulate the banking sector and pushed for bank mergers. It was the New Democratic Party in the House of Commons that fought that, with the support of the public across the country from coast to coast to coast. We pushed back at the Liberal government that wanted to deregulate and promote bank mergers.

Every single member of the NDP has continued to support rigorous banking regulation. That is what we stand for because it protects the public interest. That is why we have been such a vocal team in the House defending rigorous banking regulation. After we have seen what has happened—

[The Deputy Speaker, Denise Savoie]

Order. Questions and comments, the hon. member for Western Arctic.

[Dennis Bevington, NDP, Western Arctic, NT]

Madam Speaker, my colleague is on the right track when he talks about the state of Canadian home debt. He could have mentioned as well that our housing market is in a bubble. The price of housing has escalated to a point where, if the interest rate moves up over the next couple of years, many young Canadians will be severely impacted by it. We are in a situation now where, with any change in world politics, we can see a huge increase in the price of oil. The price of oil is already at record levels. All these things are pointing to the fact that we are living in a world where we think we have a solid and sustainable economy, but that is simply not the case right now.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Madam Speaker, that is a valid question. We are at crisis levels of household debt, unparalleled in our history under the Conservative government. We have seen real wage reductions. Under the current government, Canadians are poorer than they were a few years ago. That is an undeniable fact. There have been job losses across the country. There have been factory closures from British Columbia through to Atlantic Canada, Ontario and Quebec. There is an erosion of our manufacturing sector.

The Leader of the Opposition, the member for Outremont, spoke yesterday in the House about half a million manufacturing jobs being lost. The member for Western Arctic is absolutely right to point out as well that any jobs the government has created actually pay $10,000 a year less than the many hundreds of thousands of jobs they have lost.

The member for Western Arctic is right that under the Conservatives, Canadians are poorer.

[The Deputy Speaker, Denise Savoie]

The member for Compton—Stanstead for questions and comments. He has 30 seconds to ask a very brief question.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Madam Speaker, I believe that the amendment is perfectly relevant because the clause would grant immunity to people who have power over extremely important legislation in Bill S-5.

Once again, senior bureaucrats would hide behind the iron curtain that the Conservatives are erecting to thwart anyone who does not agree with their party. I support this amendment, and I would like my colleague to explain why the House should agree to it today.

[The Deputy Speaker, Denise Savoie]

The hon. member for Burnaby—New Westminster has 30 seconds.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Madam Speaker, I thank my colleague from Compton—Stanstead for his question. He is a new MP, and he is doing very good work in the House.

Before May 2, and even before then, the Conservatives said that they would govern in a transparent fashion, that they would respect democracy, and that they would operate out in the open. Since May 2, the government has not been transparent, nor has it shown any respect for Canadian democracy or the House of Commons. We will continue to work for greater transparency—

[The Deputy Speaker, Denise Savoie]

The hon. member for Mississauga South.

[Stella Ambler, Conservative, Mississauga South, ON]

Madam Speaker, I am pleased to speak in support of Bill S-5, Financial System Review Act, at third and final reading.

As members may recall from the second reading debate, today's bill is the result of the long established practice of reviewing legislation governing federally regulated financial institutions every five years. This practice sets Canada apart from almost every country in the world and ensures the safety and stability of Canada's financial system. This practice has also been praised as an important reason that Canada's financial system remains the soundest in the world.

Earlier this year, the independent Financial Stability Board praised this practice when it said:

...a review of all legislation to ensure that it is current, contributes to stability and growth of the financial sector and, by extension, allows Canada to remain a global leader in financial services.

The present five year review process began with an open and public consultation in September 2010 when all Canadians were invited to provide their views on how to best improve our financial system.

Before continuing today, I want to recognize and thank the members of the House finance committee for their timely review and support of today's legislation. During the committee's consideration, representatives of groups appeared, ranging from the Credit Union Central of Canada, the Financial Consumer Agency of Canada, the Office of the Superintendent of Financial Institutions Canada and more. We thank all the witnesses before the committee for taking the time to appear and give their thoughts. I will note that the witnesses were united in their belief that keeping Canada's financial system safe and secure was a very important goal.

Without a doubt, Canada's financial system is important to our economy and jobs as well. In fact, it employs over 750,000 men and women in good, well paying jobs and represents about 7% of Canada's overall economy. What is more, Canada is a world leader in this field and a model for the world to look to, especially during the recent economic turbulence.

We did not nationalize, bail out or buy equity stakes in banks like the U.S., the U.K. and Europe. In the words of Constantine Passaris, professor of economics at the University of New Brunswick:

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 for our Canadian banking system.

At the end of the day, Canadian banks proved resilient in the aftermath of the 2008 financial crisis. Furthermore, they remain solid financial institutions capable of serving as the catalyst for the economic recovery. Indeed, they are a global beacon and a role model for exemplary banking in the 21st century.

It is little wonder, then, that over the past four years the World Economic Forum has ranked our financial system as the soundest in the world. The financial system review act would help ensure Canada continues to have a financial system so safe and secure that it remains a model for other countries around the world.

As I mentioned earlier, in order to keep the legal framework of our financial system up to date, Canada reviews this legislation on a five year cycle. Ordinarily this review cycle is sufficient to keep pace with new developments. However, faced in 2008 with the deepest and most wide-reaching financial and economic crisis since the Great Depression, our Conservative government took more immediate action.

Between 2008 and 2011, we took important steps to make our financial system more stable, reduce systemic risks and ensure we had the flexibility and power to support financial institutions during a crisis. Our actions included enhancing the power of the Bank of Canada to provide liquidity to financial institutions, expanding the tools available to the Canada Deposit Insurance Corporation for resolving a troubled institution and taking proactive steps to protect and strengthen the Canadian housing market.

Our approach proved effective as the Canadian financial system remained a rock of stability through the global financial crisis and won international praise. In the words of the Irish Independent:

The Canadian system has won praise worldwide, with US President Barack Obama among its fans.

The Canadian system is undoubtedly an excellent model....

Our government has not been sitting on its hands. Instead, we have improved many key elements of our financial system and strengthened it by adding new tools. Therefore, it will not shock members to learn that, in public consultations done in advance of today's bill, most agreed that a major overhaul was not needed. That is why the financial system review act focused on minor yet significant refinements of the system, not a major overhaul.

I will briefly highlight one such key element in today's bill that has attracted some attention.

The financial crisis highlighted the importance of evaluating the overall size of financial institutions, their global linkages and the impact these factors have on financial stability, and the best interests of Canada's financial system. As a partial response to lessons learned, today's bill proposes to reinstate an existing ministerial approval for select foreign acquisitions of financial institutions.

I will provide historical background. In 1992, the government of the day amended the legislation to allow federally regulated financial institutions to own a foreign subsidiary or to hold a substantial investment in a foreign institution with the approval of the minister. In 2001, the requirement for ministerial approval and review by the Department of Finance was repealed and oversight was limited to the Office of the Superintendent of Financial Institutions.

However, since 2001, the global banking crisis has highlighted new risk factors that support greater oversight to keep our financial systems secure. As such, we are reinstating some of those historical oversight provisions that were repealed in early 2001. This would simply add ministerial approval if a federally regulated financial institution acquires a major foreign entity which increases its assets by more than 10%. The criteria that the minister could consider are hard-wired in the legislation, that being the stability and best interest of the financial sector. The timeline for approval is also hard-wired. The legislation requires the minister's consideration in 30 days or it would be deemed approved. In effect, the minister has 30 days to deny or ask for an extension. This would likely apply only rarely. In fact, since 2004, there have been only a small number of cases where the proposed legislation would have applied.

I would note that the reaction from academics, bankers and the Superintendent of Financial Institutions herself have been quite supportive of the provision. For instance, Michael King, professor of finance at the Ivey Business School said:

This kind of a rule is actually one of the reasons why Canadian banks weathered the crisis so well over the years.

Canadian banks have done well. And it’s helped the Canadian economy to have such stable banks.

Our Conservative government believes that modern and effective regulation is important for consumers and for a prosperous economy. By enacting the financial system review act, we will ensure that our financial system remains safe and secure. That is why I ask all members of this House to support Bill S-5.

[Susan Truppe, Conservative, Parliamentary Secretary for Status of Women]

Madam Speaker, I would like to ask my colleague why authority to approve acquisitions by banks is being returned to the minister.

[Stella Ambler, Conservative, Mississauga South, ON]

Madam Speaker, it was part of my speech that we would return the authority to the minister to approve these foreign transactions. This is something that did occur previous to 2001 and now we are bringing it back. Canada's sound financial system is a model for the world and we want to ensure that we keep it that way. Returning this oversight is part of the fine-tuning process that is part of this five year review. It simply requires that the minister give approval when a financial institution acquires a major foreign equity that increases its assets by more than 10%.

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Madam Speaker, we raised an issue earlier in debate and at committee where we had some representation on it. We saw a story again today in the media on the concerns with the state of the Ombudsman for Banking Services and Investments and the fact that it is the only independent body set up to protect the interests of consumers as it relates to the practices of banks. However, two major banks have now pulled out of that arrangement.

When we have asked questions, the minister has said in the past that he will set up some other kind of accountability mechanism. However, he has not yet done so and we are concerned, the banks are concerned and consumers are concerned. The fact is that the government has not moved on it. I wonder if the parliamentary secretary could give us an indication on the direction of the government.

[Stella Ambler, Conservative, Mississauga South, ON]

Madam Speaker, this legislation would protect consumers. One example is the ability of Canadians to cash cheques up to $1,500 free of charge at any bank. It also would increase the maximum penalty for violation of consumer provisions in the legislation.

Aside from those consumer protections, I want to assure the member opposite that it is because of the actions of this government that we have the most sound financial system in the world. We also have, in our Minister of Finance, the world's best Minister of Finance, and, because of that, in 2007 we began the major overhaul of this act that resulted in the kind of banking system we have today, praised by the World Economic Forum as one of the best in the world.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Madam Speaker, languishing the praise on the Minister of Finance is pretty cute because, in 2006, we know the Minister of Finance recklessly followed the U.S. lead and brought in the 40-year, zero down mortgages fuelling Canada's personal debt and housing bubble, which certainly did not help a lot of Canadians. Canadians are feeling the impact of that now.

We know that, while in opposition, the Conservatives continually pushed the Liberals to follow the U.S. lead with deregulation of the banking system. When did the light come on for the Conservative government to understand that the banking system in this country stands apart from those in other nations? For years, they chased the deregulation bus.

[Stella Ambler, Conservative, Mississauga South, ON]

Madam Speaker, my understanding is that the U.S. is actually following our model. In fact, President Obama has indicated publicly that he has great respect for our banking system, which I think is, in large part, due to this government's actions, not only in the review of the financial system review act but in all cases our economy is moving forward, has grown and has led the G7 because of the actions of this government.

[Scott Brison, Liberal, Kings—Hants, NS]

Madam Speaker, it is a pleasure to rise today to speak to Bill S-5.

This legislation does not make significant changes to the Canadian banking system. In fact, the Canadian banking system is probably, if not the most, among the most prudentially sound banking systems in the world.

That is something all of us as Canadians recognize as being important to our Canadian economy. I believe it is good for Canadian jobs. It is good for our role in the world and our influence on the world. The growth in the scale and success of Canadian banks compared to other banks in other countries, in other banking systems, in recent years has been remarkable.

It is important to recognize why that is the case. While I agree with the Conservatives when they say that the World Economic Forum and other international fora recognize that Canadian banks and the Canadian banking system are among the best in the world, where I differ from them is on the genesis of why that is the case.

The reality is that during the 1990s, when the global trend in the U.S. and Europe was to go to rampant deregulation, it was the Canadian government that said no, that refused to follow the lemmings in other countries off the cliff.

In Canada, the Chrétien government, with Paul Martin as finance minister and Jean Chrétien as Prime Minister, was under immense pressure to follow the global trend of deregulation. They said no to that. They disagreed with that because they did not believe it was in the interests of Canadian bank customers, in the interests of Canadian small business or in the interests of ultimately the prudential strength of Canadians banks to do that. The decision was made not to deregulate at that time, and thank goodness that was the case.

It is important to realize that there were many members of the Reform Party or the Canadian Alliance Party. I forget what it was at that point. They were in fact opposed to the government and the decisions at that time.

I will be the first to offer a mea culpa from my perspective, because there were times when I was critical of the government's caution at that time. I will be the first to admit that when I criticized the government for its caution at that time, I was wrong. I will admit I was wrong, and I will not take credit personally for the decisions made by the Chrétien and Martin team at that time. I was wrong; they were right.

I just wish that at some point the folks on the other side, who were also wrong at that time, would admit that they were wrong and Mr. Chrétien and Mr. Martin were right. I do not take credit personally for the fact that some very strong and sound decisions were made by the Chrétien and Martin government, because I was criticizing those decisions at the time.

Again, I was wrong. Mr. Chrétien and Mr. Martin were right and the Liberal government was right. All I am saying is that when the government speaks of, and boasts of, the prudential strength of Canadian banks and our reputation in the world, it ought to do the same thing, have the same journey I have gone on where we embrace our inner honesty and expunge our inner hypocrisy, and we feel so much better. It is completely cleansing.

Let us look at what happened in the nineties. The reality is that the Chrétien and Martin government did the right thing by not following the global trend of deregulation.

There are some other reasons why Canada is doing well and our financial services sector is doing well. Part of it is that there is a massive global trend for commodities, and we have a lot of commodities in Canada: oil, gas, mining. Just in mining finances, 80% of all the mining transactions, financings, in the world over the last five years were transacted in Toronto.

I was in Calgary last week. I met with some oil and gas finance companies and some oil and gas companies. Calgary is booming in terms of oil and gas financing.

None of us in this House, not even the Conservatives, can legitimately take credit for putting the oil and gas under the ground or the minerals or potash under the soil. The Conservatives cannot say they put the oil and gas under the ground in Alberta or the potash under the ground in Saskatchewan. We all know they did not put the oil and gas off the coast of Newfoundland and Labrador. That was Danny Williams.

The reality is that we have to be honest with each other about why we are doing well as a country. Two of the reasons are that we have a strong banking system and we have become the global centre for mining and for oil and gas transactions. That is all very good.

In this bill, specifically, one of the changes the government is making is the decision that takeovers of foreign banks by Canadian banks will be subject to not public servant scrutiny in some cases but will go to the minister's office. The minister's office will make the determination, depending on the size of the transaction and the size relative to the Canadian bank's assets. It will not be OSFI, as an example, in the public service that will have the decision to make; it will be the minister's office.

I can understand the rationale from some perspectives. The government may see that as an extra level of precaution in terms of the minister's office, but I have a concern. I raised this at committee, the politicizing of these transactions. We know Canadian banks have been very acquisitive in recent years. We have seen the Bank of Nova Scotia buy all the Royal Bank of Scotland's assets in Colombia and more recently a significant retail bank in Colombia. The Bank of Nova Scotia bought 20% of the Bank of Guangzhou for $700 million in China a few months ago.

We are seeing that happen, and that is generally a very positive news story in terms of those head office jobs that will be here in Canada and the opportunity for us to strengthen our influence, financially and in business around the world. However, I want to see these transactions judged based on prudential strength, not on politics and other issues. I think we have be careful with that.

Another thing, when we are talking about the banking system, is that one of the biggest concerns we have is the level of personal debt Canadians are carrying right now. There is $1.50 of debt, on average, for every $1.00 of annual income in Canadian families. That is at a record high. That is actually higher than that of our American friends, who are less indebted personally than Canadians today. Canadian families have the highest level of debt. It is higher than the personal debt levels of Americans.

We have historically low interest rates today. People are struggling just to get by today. A lot of people have lost their full-time jobs. They have seen their full-time jobs replaced by part-time work. We have seen a bifurcation of the Canadian economy where for people who are in Alberta or Saskatchewan, which have a lot of natural resources, it is a very different kind of economy than if they were in Ontario or Quebec or the Maritimes.

The reality is that one of the reasons why we have seen growth in personal debt is not that Canadians are going out and buying big screen TVs and boats, as the Minister of Finance said when he blamed personal debt levels on Canadians' profligate spending on big screen TVs and boats. It is not that. It is that a lot of Canadians have lost their full-time jobs, which have been replaced by part-time work.

The other factor is that the government has sent signals to Canadians and in fact has changed the rules and regulations around lending to actually encourage Canadians to take on more debt. In his first budget in 2006, the Minister of Finance brought in 40-year mortgages with no down payment, for the first time ever in Canada.

The government has to take some responsibility for the growth in personal indebtedness and the degree to which Canadian citizens and families are leveraged financially today, because it changed the rules in 2006 to 40-year mortgages—

[The Deputy Speaker, Denise Savoie]

Order, please. I must interrupt the hon. member. His time has elapsed. Perhaps in response to questions and comments, he can complete his comments.

Questions and comments, the hon. member for Algoma—Manitoulin—Kapuskasing.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Madam Speaker, I was listening to my colleague and I am glad they admitted they were wrong. We always like to hear that.

I want to talk about the amendment we have put forward, which is about transparency and accountability. I am wondering if my colleague could talk a bit about that, the fact that it is an amendment that should be put forward and one that we hope the government will actually support.

[Scott Brison, Liberal, Kings—Hants, NS]

Madam Speaker, just to give the hon. member some background, I was elected in 1997 as a Progressive Conservative, and I was elected again in 2000 as a Progressive Conservative, but at the time of the merger in 2003, I bolted. I got the heck out of there and joined the Liberal Party because I wanted to belong to a moderate centrist party.

Just to clarify, yes, I personally was wrong in the late 1990s when I was opposing some of the decisions made by the government, but I am tremendously proud to have learned and not only to admit my past mistakes but to embrace the strong, prudential policies of the Liberal Party when it comes to the financial institutions of banking.

Specifically to her question of any amendment that will strengthen transparency and accountability, I do not expect the government to support anything that will strengthen accountability or transparency. This is the most secretive, least accountable government I have ever seen. I have never, in almost 15 years in Parliament, being both in opposition and government, witnessed a government that would not provide even the costs of its legislation to the House of Commons and has to be dragged kicking and screaming and, in fact, has been found in contempt of Parliament.

I appreciate the hon. member's party amendment for greater transparency, but I am concerned that the government will not understand or appreciate that.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Madam Speaker, I listened with interest to my colleague's speech. When I listen to the Liberals talk about their past, it reminds me of an old song, Glory Days. I want to remind him of those things. Though they like to take a lot of credit for things, oftentimes circumstance bears a big part of it as well.

I appreciate, as I said, the hon. member's speech and his work in committee, but the Liberals seem to bring up 40-year mortgages that were enacted in 2006. To set the record straight, I wonder if the hon. member would agree with me that it was changed again to 30 years by the current government to better reflect the circumstances in the financial world today. I wonder if he would mind setting that record straight as well.

[Scott Brison, Liberal, Kings—Hants, NS]

Madam Speaker, I enjoyed working with the hon. member at committee. He comes from a small business entrepreneurial background and brings some good common sense to committee. I have always found his interventions to be valuable.

On this particular intervention, yes, the government did reverse the decision it had made initially to extend 40-year mortgages with no down payment for the first time in Canadian history. In fact, I would ask the hon. member to speak with the finance minister and urge him to actually say the Conservatives were wrong when they pushed for and changed the rules to 40-year mortgages with zero down payment. The only thing that changed their mind was when the bottom fell out of the global banking system. That was the only thing that changed their mind. They were saying, “Giddy-up, let's go. Let's rock and roll. Let's join the global trend of deregulation. The Liberals wouldn't let us do it, but by gosh, let's get on that horse and ride off over the cliff”. Thank goodness, they did not have a lot of time before the global financial crisis to do more deregulation of that sort, but I am sure the hon. member will agree with me that it was the right decision to reverse their earlier bad decision.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Madam Speaker, I want to remind the House that it was this Minister of Finance who, when pressed about imposing taxes on all financial transactions around the world, led the charge in telling governments around the world that would not be a good idea in financially difficult times. Therefore, we certainly trust this Minister of Finance to do the right thing, not only in the interests of this country but also around the world.

I am grateful to have this opportunity to lend my voice to today's debate on Bill S-5, the financial system review act.

In many ways, today's act can be seen as fine-tuning an already mature, stable and sophisticated financial system. As members are aware, our financial sector has been the envy of the world during the recent worldwide economic crisis and this legislation continues to build on and enhance an already strong system.

By way of background, I would note that the government reviews all legislation governing federally regulated financial institutions every five years, to ensure the stability of the Canadian financial services sector. Today's act is the product of the latest five-year review, which began in September 2010 with an open, public consultation. It is imperative that this act be passed by early April as there is a sunset clause in the existing legislation. The four principle acts that govern the financial sector, the Bank Act, the Insurance Companies Act, the Trust and Loan Companies Act and the Cooperative Credit Associations Act, all have their sunset dates renewed for five years.

Bill S-5 also contains changes to federal statutes such as the Financial Consumer Agency of Canada Act, the Office of the Superintendent of Financial Institutions Act, the Bank of Canada Act, the Canada Deposit Insurance Corporation Act and the Canadian Payments Act.

Not so long ago Canada's financial system was considered too conservative and small to be doing business on a global stage, but not any more. Now Canada is recognized and celebrated beyond our borders for having a strong and stable financial sector. As we all know, 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 as number one in its annual review of the best countries to do business. The IMF as well has heralded Canada's financial system and its oversight. It states:

The Canadian banking system was able to withstand the international crisis well, and the authorities have continued to monitor risks closely.

We can be rightfully proud of the reputation we have in this area, but that does not allow us to rest on our laurels. We must constantly update our regulations, and Bill S-5 reflects our government's commitment to this effect. Growth in the industry necessitates constant diligence within our regulations and laws.

Canada's financial sector is now operating on a truly global scale, diversifying its customer base and taking best practices to countries around the world. The Prime Minister's recent tour of China promoting our economic ties there provides an excellent and timely example of this outward growth and the Canadian financial system's increasing influence in that Pacific economic superpower. While in Beijing recently, the Prime Minister announced the conclusion of negotiations toward a Canada–China foreign investment promotion and protection agreement. This agreement is a treaty designed to promote Canadian investment abroad through legally binding provisions as well as to promote foreign investment in Canada. By ensuring greater protection against discriminatory and arbitrary practices and enhancing predictability of the market's policy framework, the agreement allows investors to invest with greater confidence. Canada has consistently supported strong, rules-based investment through the negotiation of such agreements. Once fully implemented, the Canada–China foreign investment promotion and protection agreement will facilitate investment flows, contributing to job creation and economic growth in Canada. China is now Canada's second largest merchandise trading partner and our third largest export market.

Trade in financial services has been a key part of that growth and can be expected to grow continually in the years to come. Direct investment between Canada and China has increased substantially in recent years and there has been progress with respect to portfolio investment, as well as under China's qualified domestic institutional investor and qualified foreign institutional investor programs.

Just as they are doing elsewhere in the world, Canada's financial institutions are increasing their presence in China. For example, Scotiabank recently won a bid to purchase a key stake in a bank, a major Chinese financial institution with more than four million customers. In 2010, the Bank of Montreal became the first Canadian bank and one of only three North American banks to incorporate in China. In 2010, Sun Life Everbright more that tripled its reported gross life insurance business in China through its 19 branches. The company provides insurance, covering over nine million customers. In 2011, Manulife announced licences for its joint venture, Manulife-Sinochem Life Insurance Company, to enter five new cities in China, bringing its total presence to 49 cities across 12 provinces with a total population of 350 million people. Last year, the TSX opened offices in Beijing to advance Canada's capital markets. Last year, Power Corporation of Canada purchased a 10% stake in the China Asset Management Company, the country's largest asset manager.

Chinese financial institutions are also coming to Canada to invest because of our pro-trade environment. Indeed, last year, the China Investment Corporation announced the opening of a Toronto office, representing the first permanent foreign location for this huge Chinese financial institution. In the words of the president of the China Investment Corporation:

There are countries with comparable economic characteristics to Canada, but with a lot less friendly environment. In our dealings with the Canadian government, various parts of the government, with the business people, we feel that it’s a lot more congenial to our investments.

Canada's financial services industry is merely one example of an industry whose horizons have broadened significantly. As the Prime Minister's recent visit made clear, these efforts are reaping results.

Here at home, we are making the necessary adjustments to foster this growth. That is why today's bill would reduce the administrative burden. For example, federally regulated insurance companies offering adjustable policies in foreign jurisdictions would be relieved from providing duplicate disclosure requirements.

In the years to come, though it is already an attractive place for trade and investment, Canada will become an increasingly attractive choice for trade and investment, including financial services.

Being a prime choice for trade and investment does not happen easily, but here in Canada it happens for several reasons. First, we have relatively solid economic fundamentals compared to most of our peers, especially among the G7. Over 610,000 more Canadians are working today than when the recession ended, resulting in the strongest rate of employment growth by far among the G7 countries. Even better, nine of ten positions created since July 2009 have been full-time positions, with close to 80% of those being in the private sector. Real GDP growth is now significantly above pre-recession levels, the best performance in the G7. We have also reduced red tape, and we continue to promote free trade through not only our tariff changes but also our free trade agreements.

I am proud that our Conservative government has signed free trade agreements with nine countries and that we are in negotiations with an additional 50 countries, including India and the European Union. As chair of the Standing Committee on Foreign Affairs and International Development and a former member of the international trade committee, I have seen first hand how these trade agreements strengthen our economy and provide Canada with a greater voice on the global stage.

I am also proud of our low tax plan, which has resulted in Canada now having an overall tax rate on new business investment substantially lower than that in any other G7 country, and below the average of the member countries of the OECD. This low tax plan is about making Canada a strong destination for investment and jobs, not driving businesses and jobs away with massive tax hikes like the NDP proposes.

Bill S-5 will ensure that our financial system remains a critical element of our success and maintains its place in the ranks of global leaders.

If we look at what the government has been doing over the last number of years, as I mentioned earlier, lower taxes and reduced red tape have been important. Nonetheless, there have been many other things that the Prime Minister and the government have done, including trying to resolve border issues with the president of U.S., for example, so that our goods can flow more freely across our borders. I also mentioned the additional places to sell our goods through the variety of free trade agreements, as well as our continued commitment to maintaining a strong and stable banking system.

As we look at these things there are also R and D investments that we continue to make. We realize that the way we are going to move forward is by being able to commercialize some of these R and D opportunities.

We realize that a strong financial sector is not only important to business but also equally important to all Canadians, who depend upon it for jobs and for their daily financial transactions.

I encourage all hon. members to support this important legislation and see that it is passed.

[Dennis Bevington, NDP, Western Arctic, NT]

Madam Speaker, I listened to my colleague's speech with some interest. I think financial issues are always important. Nonetheless, it is also very important to have the correct data.

As the Conservatives have said over and over again as their mantra, they have created 600,000 jobs since the recession. I know they are pleased about that. However, they have presented that point in a context that is not correct. They do not talk about the expanding nature of the workforce. If they had mentioned that fact they would then have been led to actually talk about the unemployment rate, which is about 2% higher than it was before the recession. Therefore, when they say we have had a full recovery and everything is going so well, that is really not the case. They are using figures in that fashion and hoping that by saying them over and over again as their mantra, everyone else will agree.

We do not agree. We think that when financial information is presented to the House of Commons, it should be done correctly and adequately so that the people of Canada can understand what is happening in the economy. Does my colleague not agree with that?

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Madam Speaker, in terms of numbers, my colleague from Western Arctic mentioned 600,000. We believe that the number of new jobs created is actually closer to 610,000.

We all understand that this has been a particularly difficult time around the world. I am concerned what would happen if the NDP were actually in government at a time like this. Would there be more taxing and spending? Would we actually see the kind of growth we have had?

We know that many countries have been affected by this recession. The good news is that our country has recovered far faster than any other country.

Are there more things that need to be done? Yes, by all means. We will see some of them in the budget that will be presented here in a couple. We will continue to build on the success we have already had, including working to create new jobs, because that is of paramount importance to this government. We will continue to reduce red tape, as we have mentioned, and create more opportunities for Canadians here at home.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, we spend a lot of time talking about banks when discussing this bill, and for just reason. Even so, I am interested in hearing a comment on the whole area of credit unions.

Credit unions have played a significant role filling in where a lot of banks, and the banking industry as a whole, have been closing down some of their branch offices. Many of the constituents I represent want to see a larger role for the Assiniboine Credit Union, the Steinbach Credit Union and credit unions in general.

I wonder if the member would comment on credit unions in regard to this particular bill.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Madam Speaker, credit unions do play a vital role. I bank at a credit union and I think they provide an important role.

When we look at context of what we are dealing with here today, all that is being done by this government bears mentioning again. Making sure that our banking system is stable is just one of those mechanisms. The other measures that we need to look at are cutting taxes; continuing to spend money on R and D; and creating opportunities for our goods, which means reaching free trade deals around the world. There is a whole combination of initiatives we need to take to continue to make our economy strong and to provide an opportunity for us to continue to grow in the future.

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

Madam Speaker, there are some really technical pieces to this legislation. Amongst those technical pieces are measures such as thresholds for bank ownership and ownership thresholds on financial institutions.

Can the member tell me why the large bank ownership threshold is being increased as part of this piece of legislation?

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Madam Speaker, as we look at the changes taking place around the world, it is important that we continue to keep pace with them. One of the reasons we are looking to increase thresholds from $8 billion to $12 billion is to reflect growth in the sector and to ensure that we keep up with those requirements as we continue to grow.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Madam Speaker, I would like to begin with a quotation from Mr. Hollande, the socialist party candidate in the French presidential election. He said:

...my real adversary has no name, no face, no party. It will never run for office, will never be elected, and yet it governs. My adversary is the world of finance.

We had a golden opportunity to make major legislative changes that would have benefited all Canadians, not just the financial institutions as institutions, but also the people who use them, the people who need them, the people who deal with them.

The first problem with this bill is that it comes from the Senate, an unelected institution that does not include a single NDP member even though the NDP is the official opposition. Naturally, as a New Democrat, I have issues with that. We have been left out of the back-room-election-making and fundraiser-ticket-selling club. We are not there, and that is a shame.

This also means that those people are not listening to Canadians. They are not accountable to the public nor did they even hear from them. This bill was introduced surreptitiously, but Canadians deserve more. They deserve to see more studies, more deliberation and much more ideological exploration. The people in the other place did nothing more than gather a few technical facts. They did not ask any questions about how Canada's future should look in terms of wealth distribution. No such questions were raised in the Senate. Those people are not accountable to Canadians. That is the first problem.

Let us also talk briefly about something much more serious. At present, the large corporate financial institutions, taken together, have access to a pool of $500 billion. That $500 billion is not being used at this time. If only a small fraction of that money were invested in industry, this would generate substantial economic gains for Canada. Instead of exporting Canada's raw materials, we could process them right here. But the financial sector is not interested in making that kind of investments.

The question is whether we want speculation and foreign takeovers and purchases, or whether we are simply trying to build a modern, competitive industry. This would have been an interesting question. It would have been appropriate to bring in regulations to limit increases in speculation in order to steer our financial capital towards what our industrial capital needs. That is not the case here. Unfortunately, that is never the case with the Liberals or the Conservatives. They are always seeking immediate gain. It would have been better to look more than just a few years ahead and to look at what we can do better. None of that was considered in this bill.

There is another problem. In Canada, the co-operative sector plays a major role. It was introduced, in the past, in Canadian operations. There is also the phenomenon of mutualization inherent in the co-operative system. It is not protected and that is too bad. The co-operative system needed to be protected from privatizations whereby all the capital of past generations is divided among the current owners or members of the co-operative. This means that all the sacrifices made by past generations in order to create a co-operative will be distributed to a few individuals. There have been some abuses in the past, there are some happening in the present and, unfortunately, there will be some unacceptable abuses in the future. There is no mention of that, but it is a financial sector that deserves to be defended.

Where do consumers fit in all this?

Households are currently overloaded with debt in part because of the inflated value of homes and the speculative nature of purchasing a home. People are taking on too much debt and that debt is not going down.

Unfortunately, this is triggering bankruptcies at a time when salaries are stagnating and prices are increasing, including the cost of borrowing. As a result, the Canadian financial system is becoming an aggressive force against consumers. Consumers are paying dearly: 19% interest on credit cards, very low interest rates on deposits, extremely low returns on RRSPs. All these flaws remain unaddressed.

The bill could have addressed credit cards. By all accounts, 19% interest on credit cards is excessive. The bill could have put a cap on the glut of credit that causes people to go further into debt. This could have been limited or tightly regulated. That is not the case.

With respect to holds on deposits, apparently the fact that a $1,500 federal government cheque will not have to be held, that financial institutions will be required to deposit it immediately, is a major development. However, this was already included in a previously passed bill. It is not a major development.

The representative of the Standing Committee on Finance, the member for Saint Boniface, made it sound as though this was a significant improvement. Representatives of the Office of the Superintendent of Financial Institutions told her that the only problem was that it was already being done, that the amendments to these laws are already reflected in current practices and that there were no improvements. That is a major problem. Much more could have been done.

There is also the matter of one-week holds on deposits of corporate paycheques. This period is far too long. It could have been reduced through regulations. There are abuses and red tape. This government boasts about wanting to minimize red tape and, in this instance, it has failed big time.

Finally, there is no mention in the bill about a whole host of new financial products, such as commercial paper and derivatives. That is dangerous. The Conservatives say that our financial institutions are highly regulated and that our system is doing well because of regulations governing our access to credit. That is fine, but the bill deals with financial products that already exist.

As we saw in 2008, the problem lies with all the financial products not governed by any regulations. This proved to be very costly for Canada, and people are still paying the price, especially in their RRSPs. These plans and Canadian pension funds sustained major losses. The situation has not been addressed by this bill, which does not protect consumers. The bill does not protect pension plan members. It only protects a financial system that wants rapid and massive growth, looks for the quickest profits, and is not interested in the general prosperity of Canada, only in the prosperity of its financial institutions.

In view of the fact that the legislation will be reviewed in five years, we have missed a good opportunity to finally meet our economic needs and to come up with something useful, if only in terms of available capital, ensuring that the industry has the means to promote investment. This would help Canada in these times.

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Madam Speaker, I appreciate that my colleague, who is an active member and participant in the finance committee, brings a lot of passion to his role and our role in trying to ensure that the financial legislation and efforts we make here with respect to proper and accountable banking rules and regulations are put forward in a good common sense fashion.

Could he comment on what appears to be nonchalance on behalf of the government as it relates to legislation like this, which it likes to class as technical in nature and therefore not that important? The government could have done what he already has suggested, which is move forward with some real and proper protections for consumers. Could he comment on that?

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Madam Speaker, there was indeed a golden opportunity to limit some types of abuse. Good heavens, how can I say this in a way that is polite and parliamentary? Clearly, there are sharks in Canada and, unfortunately, consumers are the goldfish in the aquarium. And yet, the government is not making any changes.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Madam Speaker, the hon. member spoke to us about household debt, and also about some kinds of unregulated speculation. Could he elaborate on this shortcoming in the bill?

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Madam Speaker, right now, the entire bill oriented toward speculation or immediate gain in the financial sector.

In the real estate sector, the decision was made to promote housing accessibility. That is fine, but unfortunately, more and more people are overburdened by debt as a result of interest rates and business practices. The average household debt to income ratio has now reached 125% or even 150%. This ratio is over 175% in the Vancouver area because of a significant housing bubble. That is unacceptable. We are about to hit a wall. If the Canadian housing bubble ever bursts, the entire Canadian economy will suffer.

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

Madam Speaker, I appreciate the member's intervention today. As he said earlier, there are a number of technical aspects to this, and he spoke about some of the things that he viewed should have been done. However, there were some key things that were accomplished through the legislation that were different from previous versions of the legislation. One of those was the approval of foreign acquisitions by banks. Under this legislation, the authority to approve foreign acquisitions by banks is being returned to the minister.

In his appreciable understanding of this legislation, why does he think that is important?

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Madam Speaker, all in all, with all due respect to the Conservative member, what was important was the approval by the Superintendent of Financial Institutions. The fact that this operation is being politicized does not seem particularly relevant. What was really important was approval by the Superintendent of Financial Institutions and the criteria upon which that approval was based.

The NDP wanted to point out that this measure needed to be good not only for the health of financial institutions but also for Canada's economy. Our colleagues on the Standing Committee on Finance found that it was unacceptable for the government to simply say that this would be good for the Canadian economy. I find this situation to be extremely unfortunate. The truly critical element was the criteria upon which the approval would be based.

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

Madam Speaker, I am pleased to speak to the third and final reading of the financial system review act, Bill S-5.

I will begin by saying that Bill S-5 is important to the strength of Canada's financial system and I will briefly describe how it came about.

Every five years, the government conducts a review of the policy framework governing federally regulated financial institutions. The previous legislation review was completed in 2007. The present five year review was launched in September 2010 when the finance minister invited Canadians to share their views on improving our financial system by way of an open consultation process. This five year review process helps guarantee Canada keeps its status as a global leader in financial services and it maintains the soundness of the sector.

A key priority for our Conservative government is ensuring Canadians keep on having a strong and secure financial system and one that serves as a model for countries around the globe. Today's bill would ensure that continues to be the case. In fact, the World Economic Forum recently ranked Canada as having the soundest banks in the world for the fourth year in a row. Both in Canada and internationally, this strength has been widely recognized by independent observers.

Peter Worthington, noted Toronto Sun columnist, declared:

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

An Ottawa Citizen editorial reads:

Our banking and financial system is the envy of the world. While the great money edifices of countries such as the U.S., Britain and Switzerland cracked at the beginning of the recession, Canadian banks stood firm.

However, as I mentioned earlier, this recognition stretches well beyond Canada's shores, as it is repeated around the globe.

David Cameron, Britain's prime minister, has heralded our system by saying:

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. ... Your economic leadership has helped the Canadian economy to weather the global storms far better than many of your international competitors.

The Irish Times has applauded it by saying:

Canada’s policy of fiscal discipline and strict banking supervision was a reason why it was one of the world’s strongest performers during the recession.

The Economist, the renowned magazine, has recently asserted that “Canada has had an easier time than most during the recently global recession, in part, because of a conservative and well-regulated banking system”.

The financial ratings agency Fitch, when reviewing Canada's top tier AAA credit rating, focused its assessment on the fact that “Canada's banks proved more resilient than many peers thanks to a conservative regulation and supervision environment.

I share and welcome that high praise.

Furthermore, the financial services sector has a significant role in the health of the Canadian economy. Not only does it represent 7% of Canada's GDP, it is also responsible for over 750,000 good, well-paying jobs. It also plays a distinctive, indispensable function in fuelling the growth, nurturing financial stability and safeguarding savings, all of which are necessary for the success of Canada's economy.

Today's bill would contribute to the continued strength of Canada's financial system. Indeed, the mandatory five year review that shaped today's bill is key to helping set apart Canada from almost all other countries. This practice makes certain that the laws governing our financial system are reviewed and updated on a regular basis, ensuring they are responsive to an ever-changing global marketplace.

In a similar vein, the global financial crisis of the past few years has underlined why a stable and well-functioning housing market is necessary for the financial system and overall economy.

While Canada's financial system remains sound, well-capitalized and less leveraged than its international counterparts, our government proactively acted to bolster the stability in our housing market by adjusting our mortgage insurance guarantee framework. This included reducing the maximum amortization period for government-backed insured mortgages with loan-to-value ratios greater than 80% from 35 years to 30 years.

As well, we withdrew government insurance from home equity lines of credit and lowered reduced borrowing limits in refinancing.

Independent observers and economists have roundly applauded such adjustments. For instance, a recent Waterloo Region Record editorial said, “The federal government has done the right thing in tightening up the rules for mortgages in this country”. A Calgary Herald editorial added, “...the right direction...it is good to see the government continue to be vigilant on this file”.

Without a doubt, our Conservative government is working hard renewing many key fundamentals of our financial system and strengthening it with new tools.

Through the financial system review act, we are modernizing, fine-tuning and harmonizing the existing framework to ensure it keeps the high level of performance. Canadians know and understand that the present framework that has made our financial system the soundest in the world functions well.

That is why the financial system review act seeks to build on, not rebuild, that solid foundation with a proposed legislative package that includes measures to: better focus financial institutions legislation to support financial stability and guarantee Canada's financial institutions keep operating in a competitive, effective and stable environment; fine-tune the consumer protection framework, including further improving the Financial Consumer Agency of Canada's powers; and reduce the administrative red tape on financial institutions to enhance efficiency and add regulatory flexibility.

Other measures contained in today's bill include: increasing the capability of regulators to effectively share information in a timely manner with international counterparts while respecting privacy laws; guaranteeing the right to cash government cheques under $1,500 free of charge at any bank in Canada to all Canadians; enabling co-operative credit associations to provide technology services to a broader market to promote competition and innovation; and much more.

I am happy to note that many public interest groups have given their strong endorsement of today's bill. For instance, the Canadian Life and Health Insurance Association declared:

It is important that legislation be periodically reviewed so that it keeps up with the changing environment.

The industry welcomes a number of measures outlined in...[the financial services review act].

Today's bill would strengthen stability in the financial sector, improve the consumer protection framework and modify the regulatory framework to new developments. It provides for a renewed structure that will benefit all Canadians.

We recognize that, to remain a global model of stability and ensure the soundness of the financial sector for all Canadians, routinely reviewing what regulatory changes are necessary to foster competitiveness is essential.

The financial system review act upholds the long-standing tradition of ensuring standard reviews of the regulatory framework for financial institutions to keep a stable and secure financial sector. For that reason, I urge all members to support for all Canadians today's bill and the continued safety and security of our shared financial system.

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Madam Speaker, does the member share my concerns about what is happening with the Ombudsman for Banking Services and Investments, the organization that was set up to properly monitor the practices of the banks? It is an independent group as opposed to the banks themselves setting up dispute resolution mechanisms. This is an arm's-length body that would resolve disputes between consumers, be they individuals, companies or otherwise. Two of the major banks have pulled out, making this service ineffective, and it is now looking at closing its doors.

I wonder if he shares my concerns that now there will not be any independent dispute resolution body and that it will be left up to the banks to do as they wish.

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

Madam Speaker, that certainly is one mechanism that could provide input, but speaking specifically to this particular bill, we would like to move ahead with this bill because we have gained in excess of 30 deputations on behalf of various groups in this review. This review, as members know, is mandatory and it takes place every five years. I am comfortable that the process in place will give us the fruitful requirements we need for regulation and to maintain the banking stability in Canada.

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

Madam Speaker, earlier I had asked one of the opposition members a question about the authority to approve foreign acquisitions by banks being returned to the minister in this legislation. The global banking crisis has highlighted additional risk factors that support more oversight to keep our financial system secure and, therefore, this legislation will require ministerial approval when a federally regulated financial institution acquires a major foreign entity that significantly increases its assets by more than 10%. I wonder if the member could comment on the particular two criteria that the minister would consider.

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

Madam Speaker, as the member indicated in his previous question, the legislation would improve the process of foreign acquisitions by banks.

In addition, this legislation would update financial institutions legislation, would fine-tune consumer protection and would improve efficiency by reducing the administrative burden. As a package, in addition to the function the member mentioned, this is a first-class package to keep Canada's banking system competitive and continue to attract jobs, like the more than 610,000 jobs, as we mentioned, in Canada.

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Madam Speaker, I want to be clear. This is report stage of the bill and not third reading as has been suggested by some members on the government side. We are now dealing with an amendment to the bill. It is a very wise and reasonable amendment introduced by my colleague, the member for Burnaby—New Westminster, and I thank him for that.

The amendment to Bill S-5 would delete clause 212 with respect to paragraph 39.1. This clause would give statutory immunity to the Office of the Superintendent of Financial Institutions in respect to any civil proceedings. This is an important amendment to which we need to pay attention. The immunity resulting from the deletion of this clause would negatively impact the office of transparency and accountability to the Canadian public. We should all be concerned about that. Time lost as a result of frivolous claims, as the government has suggested, does not justify such a radical measure.

In the process of trying to remain transparent, open, reasonable and independent, we need to allow that there will be the odd complaint and submission that may not end up to see the light of day or may not have basis. However, every Canadian who deals with the banking system or any government supervised and regulated system or bureaucracy should have the opportunity to bring their concerns forward. It is not up to us to decide what complaint is illegitimate until we have the opportunity to give those concerns a thoughtful review through reasonable process. My concern is the government is applying immunity to this office and to the officer simply because there are not enough complaints to warrant the attention.

Finally, this immunity, as suggested, would at best amount to an abdication of the superintendent's responsibility and, at worse, to covering up serious errors that could have been avoided.

The point of the amendment is to deal with the question of transparency and accountability. I urge all members opposite to consider the value of ensuring we do not dismiss out of hand any concerns that may be brought forward by Canadians in relation to the Office of the Superintendent of Financial Institutions.

My colleague, the member for Burnaby—New Westminster and finance critic for the opposition, sponsored this amendment. He also indicated early on, as we did at second reading debate, that the opposition would support Bill S-5. We have given it some serious consideration, we have examined it and there is nothing particularly untoward, although we think the amendment is needed to address a flaw that needs to be corrected.

We also introduced amendments at committee that we thought would add to the bill. My colleagues and I have spoken at second reading and at committee about the missed opportunity.

The law provided that we needed to have this review conducted by April 20 to comply with the Bank Act. We suggested on numerous occasions that this provided an opportunity for the government, if it were serious about important issues like consumer protection, to speak with Canadians about their concerns as they related to the Bank Act and to make changes that were necessary.

We brought up a number of things. Whether it is outrageously high interest rates charged on credit cards, or banking charges that continue to go up, or the various ways that within the system consumers are being nickel and dimed out of tens of thousands of dollars every year, there are ways for us in the House, through this review, to properly protect those consumers and ensure the financial institutions covered by the act are acting properly. Unfortunately, we missed that opportunity. I indicated to constituents who brought it to my attention that I was sorry the government missed this opportunity.

Also, I am disappointed that once again the government has not engaged in as fulsome a process of consultation as it could have. Frankly, the consultation was truncated. It was not transparent. The government did not hold public hearings. It was by invitation only. We heard the government had 30 representations. Some of those were not even made public, not even shared with us on the website. Some organizations voluntarily agreed that their submissions should be public and made them so, but the government held consultations that were kept private. That is unfortunate.

I do not think that is necessary. We can be much more forthcoming and trusting of Canadians. We can recognize that Canadians have a great deal to offer to discussions like this. We think to ourselves that the whole issue of financial institutions and the regulation of the banking system is technical and above the average Canadian's head.

If it had not been for Canadians understanding the consequences of the deregulation and of allowing foreign takeovers of the banking industry that was being proposed by the Martin government, if it were not for the outcry of Canadians, whom we in the NDP caucus and others try to represent in debate, we would have gone down a perilous track that would have seen us follow far too closely the problems we saw in 2008, and beyond, in the U.S., Iceland and in far too many European countries. There the banking systems have been deregulated. We have seen the kind of turmoil that has been created as a result of the lack of adequate oversight.

It is because I have that kind of confidence and faith in my constituents and Canadians to understand the value and technical nature of issues like this that I get perturbed by the government members or members of the third party who were once in government. They want to take credit for the nature of the banking system that has developed over the years. However, it was because of experience and the wishes of Canadians and their representatives in the House that it be strongly regulated and protected from the vagaries of global competition and foreign ownership and that it was in much more stable shape in 2008 and able to considerably weather the storm. Although let us not forget that the Government of Canada did spend $75 billion to buy mortgages that were threatened by Canada Mortgage and Housing.

We need to give Canadians more credit for their knowledge on issues as important as the Bank Act.

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

Madam Speaker, I am going to keep chipping away at this idea of the authority of the minister under this version of the legislation to approve foreign acquisitions. We have heard from across the floor, in a number of debates here, about the importance of protecting against that. The criteria that the minister would include under these circumstances, and they are very hard-wired, would be the stability and best interests of the financial sector. As well, the timeline is hard-wired. It requires the minister's consideration in 30 days or it will be deemed approved. The minister has 30 days to deny or ask for an extension.

Does the member across the way think this is an appropriate authority under the legislation and that those timelines are reasonable?

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Madam Speaker, I am concerned about the added authority given to the minister in any regard. With respect to timelines, we have the timeline provided under the Bank Act that we need to conduct this review by April 20. The government took until this fall to bring the legislation through the back door, through the unelected Senate. It only came to this chamber a month ago for debate at second reading. Just in case the opposition identified concerns with the bill, the government would be able to stand and say that the opposition was playing games, that it needed to pass the legislation because it had a deadline.

Deadlines are important. We need to acknowledge that, especially in a matter as important as this. However, we still need to allow for proper time so there is appropriate consultation with Canadians and due process in the House.

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

Madam Speaker, I hope the hon. member for Dartmouth—Cole Harbour will bear with me because I had wanted to ask a question of the hon. member for Niagara West—Glanbrook.

He spoke in favour of the bill, and I think we all find the bill relatively acceptable. It certainly is more business housekeeping than anything very radical. However, he happened to mention that he supported the Minister of Finance in opposing the international financial transaction tax, a transaction tax that the Green Party supports very strongly. It is only 2¢ on every $1,000 of international derivatives trading, which brought the world nearly to ruin.

I would like the hon. member's thoughts and perhaps the official position of the New Democratic Party on the financial transaction tax.

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Madam Speaker, I share concerns over the government's opposition to this important measure.

However, I will raise another concern that has been brought up, and that is how government members have said that the bill is good because it removes regulation and red tape. Within days or weeks we are going to hear about the value of reducing regulation and red tape as it relates to environmental assessments and how good that is going to be for the country. When the government says removing that kind of regulatory control is good for the country, I think of that. When the government says something is good for us, it is generally just the opposite.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Mr. Speaker, I am pleased to speak to Bill S-5, the financial system review act, at third reading.

As members are aware, the recent financial crisis tested the skills of many: policy-makers, regulators, bankers and investors. However, it also served to demonstrate the overall soundness of our financial system.

It was no accident that Canada escaped the worst of the global financial crisis with no bank failures or forced bailouts by taxpayers. Our legislative framework was built to withstand such shocks with high prudential standards, excellent regulation supervision, a flexible monetary system and good mechanisms to ensure financial stability.

However, when faced with such unprecedented market volatility in 2008-09, our government went further by acting quickly to improve this excellent framework, boost financial stability and ensure access to credit during a liquidity crunch.

Bill S-5 will build on the existing strengths of Canada's financial system and fine-tune a framework that has proven to be both efficient and effective. In the words of Canadian Life and Health Insurance Association Inc., Bill S-5 represents a welcome fine-tuning of the various financial institution statutes.

How will Bill S-5 achieve this? The bill will improve the ability of regulators to share information efficiently with their international counterparts. This will help fulfill our G8 commitments at a time when financial institutions increasingly operate on a global scale. It will ensure effective supervision and regulation across the borders.

Bill S-5 also proposes to improve the consumer protection framework, including enhancing the supervisory powers of the Financial Consumer Agency of Canada, FCAC, and increasing the maximum fine that would be levelled by the FCAC for the violation of a consumer provision of its act to make it consistent with administrative monetary penalties levied by other regulatory agencies.

The FCAC is mandated with ensuring that the federally regulated financial institutions adhere to the consumer provisions of the legislation governing financial institutions and their public commitments.

The FCAC is also the government's lead agency on financial education and literacy, and has moved forward with an array of excellent incentives in recent years. The agency has developed innovative tools to help Canadians, such as a mortgage calculator that quickly determines mortgage payments and the potential savings resulting from early payments. It has also created innovative online information to help consumers shop for the most suitable credit card and banking packages for their needs.

Our government believes Canadian consumers deserve accessible and effective financial services that meet the needs of consumers and operate in the public interest. That is why in budget 2010 we announced we would take action to prohibit negative option billing and require timelier access to funds.

The regulations will come into force this August and will require federally regulated financial institutions to obtain consumers' express consent before providing a new optional product or service. This will allow Canadians to receive all required information on the optional product or service to help them make the financial decisions that are best for their circumstances.

The regulations will also reduce the maximum cheque hold period for retail depositors and small and medium size businesses, and will provide retail depositors faster access to the first $100 deposited by cheque. Shorter cheque hold periods and faster access to funds will benefit Canadians by enabling them to manage their personal finances more effectively. After all, well-served and confident consumers contribute to the well-functioning financial markets and the economy.

Indeed, in the words of a recent Globe and Mail editorial:

Of the many things that frustrate the retail customers of Canada's federally regulated banks, one of the most egregious has been the practice of putting a hold of as many as seven days on deposited cheques. Now, thanks to new measures recently...announced...that upsetting practice and others are coming to an end.

[T]he government has shown a commitment to its promise to improve banking regulations in Canadians' favour. This is welcome news.

Similarly, in 2009, as part of the measures to improve access to financing, the government announced that it would bring forward measures to help consumers of financial products, including launching a task force on financial literacy.

The task force on financial literacy was mandated to provide advice and recommendations to the Minister of Finance on a national strategy to strengthen the financial literacy of Canadians. In support of the recommendations of the task force on financial literacy and delivering on a commitment from budget 2011, the government introduced Bill C-28, the financial literacy leader act. Bill C-28, a piece of legislation which I urge all members of the House to support, would provide for the appointment of a financial literacy leader who would collaborate and coordinate with stakeholders to strengthen the financial literacy of Canadians.

Canada's national strategy on financial literacy will support the excellent efforts under way throughout the country and empower Canadians to act knowledgeably and with confidence in managing their personal financial affairs.

I would be remiss if I closed without quickly reviewing other important initiatives in Bill S-5. They include: updating financial institutions legislation to promote financial stability and ensure Canada's financial institutions continue to operate in a competitive, effective and stable environment; improving efficiency by reducing the administrative burden on financial institutions and adding regulatory flexibility; promoting competition and innovation by enabling co-operative credit associations to provide technology service to a broader market; and reducing the administrative burden for federally regulated insurance companies offering adjustable policies in foreign jurisdictions by removing duplicative disclosure requirements.

In summary, the financial system review act provides for a framework that will benefit all participants in the financial sector, financial institutions as well as all Canadians. It maintains the long-standing 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.

In fact, U.K. Prime Minister David Cameron said it best:

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.

He went on to say that our economic leadership has helped the Canadian economy to weather the global storms far better than many of our international competitors.

Clearly, this government recognizes that it must continually consider what regulatory changes are needed to ensure that the fundamentals of the Canadian economy remain sound, that consumers are well protected, and that Canada continues to be an attractive place to do business in today's competitive global economy. This is precisely what the government has done with this bill.

On that note, I urge members of the opposition to stand up and support the swift passage of Bill S-5. To vote against the bill would not just be a vote against the Canadian economy, but a vote against the Canadian consumer.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Mr. Speaker, I thank the member for his remarks and for participating in this debate. However, I am still somewhat skeptical about immunity for senior bureaucrats in matters as serious as finance. Canadian families are going deeper and deeper into debt. Any time there is any kind of fraud or thievery or anything like that in the financial sector, the middle class and families carrying the biggest debt loads are always the hardest hit.

Should senior bureaucrats in sectors like finance be given immunity? What does the member think?

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Mr. Speaker, I know of the member's passion for consumers, for citizens, for the middle class, as he said, for those who are sometimes more vulnerable.

That is what this bill is all about. The bill would strengthen the FCAC and its powers. The bill would continue to ensure that consumers are protected. The very things he talked about are the things this bill would make sure continued so that Canadians would have the safety and what they expect from a banking system that is second to none in the world.

[Stella Ambler, Conservative, Mississauga South, ON]

Mr. Speaker, we have heard a fair bit this morning about how this legislation would protect consumers. I am wondering if the member could speak to the banking system in a more general way with regard to not only the statutory review process but also the fine-tuning versus major overhaul we are talking about today. Why was it necessary? Why was it not a complete overhaul? Perhaps he could speak to the banking system as a whole and what makes it as strong as it is and our government's response to the global financial crisis.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Mr. Speaker, there has been a lot of talk today about the fine work of the government and the regulatory systems in place. There is another element that has somewhat been left out. It is something I am very pleased with and maybe it is what the hon. member was alluding to, which is the fact that we have in place a system of banks and bankers that understand what it means when someone's money has been entrusted to them. In committee I have often referred to them as the line of Scottish bankers. I am of Dutch heritage and I understand that a bank knows that when it lends a dollar out, it is not the bank's money that it is spending. We have a good relationship in this country with banks and bankers. There is a good relationship with the government. Together we have managed to achieve what most other countries in the world have failed to achieve.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, I want to speak to the amendment, which is what the debate is on right now. It is particular to clause 212 regarding proposed section 39.1 which would give statutory immunity to the Office of the Superintendent of Financial Institutions in respect of any civil proceedings.

My question is very simple. Will the government support our amendment that would actually provide more transparency and accountability?

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Mr. Speaker, this has been debated in committee. I sit on the finance committee. No, I will not be supporting the amendment. I do not think the amendment is in the spirit of what this bill is trying to do, and that is to strengthen our banking system.

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, in this House today and previously, we have heard a lot about all of the consultation that went into this process, but let me start by talking about the process.

I believe that the members across the aisle missed a magnificent opportunity when they addressed this bill by focusing only on its technical and very narrow aspects or revisions. This was their opportunity to address the banking legislation and our financial statutes in a significant way.

Be that as it may, they erred very seriously when it came to process. First of all, this legislation has come from the other house, the Senate, which only had three weeks to consider it. Then the legislation came over here with all kinds of time allocations and was then sent off to committee. It is with a great deal of distress that I read that even at the committee stage, there were only three sessions. I know many people at home are going to think that each session lasts a day, but each committee session is only two hours long.

To do a detailed study of a very technical bill, and I am not a very technical person, and to look at its implications and to examine it and make amendments, a total of only four hours was provided. Out of the three days the bill was before committee, one was to hear from witnesses. I really cannot understand how my colleagues sitting across this aisle can see this as truly democratic and transparent. How can they disrespect the parliamentary system so much, not only by calling time allocation over and over again but also by then cutting debate short at the committee stage?

I have heard the argument that the timing of this bill is sensitive and that a clock is ticking. I also know that the government could have tabled this legislation as soon after May 2 as it could, but it choose not to do so because at no time did it want to give either the public or the opposition a chance to study this legislation in any detail.

Not only that but I also heard earlier from a very well-respected speaker from across the aisle, who shares a panel with me every Thursday, about the consultation that had occurred. However, when I looked at the consultation report, most of those inputs by email were anonymous. Since when have we started to take and pay heed to anonymous input on significant pieces of legislation that actually address our banking industry? It is just so bizarre. Plus, this kind of consultation was by invitation only. Let us not pretend that real consultation took place.

Let me recap. Time allocation pushed things through; the legislation went to the Senate first; consultation was practically non-existent; and the committee stage was cut short, with no serious time given.

What are the Conservatives trying to hide in this legislation? I believe what they were trying to hide is what they have not addressed in the legislation, something that concerns Canadians right across this beautiful country. One thing they have not addressed is the regulations around the ever-growing debtload that Canadians are being burdened with because of the economy and the lack of decent paying jobs in Canada. Indeed, we seem to be giving our jobs away to other countries. Where there were jobs that used to pay a decent wage at one time, now there are $9 and $10 an hour jobs. We know it is hard to sustain a family on that kind of an income.

Families are really taking on more and more debt, and we are not paying attention. I have learned from an analysis done of the debt load of Canadians that in some cases family debt is as high as 151% of disposable income. That is disturbing. It surpasses the debt load of Americans before a collapse in their economy. We should be addressing that, and so this is a missed opportunity.

What is also adding to consumers' debt load is not the fact they choose to buy big entertainment systems or super-duper cars. Rather, it is because of the lack of decent paying jobs, which have left this country because of the government's policies, that many people are struggling and trying to make ends meet from paycheque to paycheque and are reliant on their credit cards. The banks, through credit card interest charges, are gouging Canadians. They pay next to nothing in interest to those who are fortunate enough to have money to put in the bank, and they think nothing about charging 18% or more in interest on credit cards. That is a shame and a golden opportunity that the government has once again missed addressing. It has failed Canadians in a significant way.

I want to quote one of the witnesses who came before committee in the two hours allotted to them. Tyler Sommers, a coordinator for the Canadian Community Reinvestment Coalition, questioned why the government had not done more for consumer protection. He said the following:

Canada's big six banks have reported new record first-quarter profits totalling over $7 billion, which is up 5.3% compared to 2011, and have done this while raising bank fees and cutting jobs in this sector....

Shame on us that we have failed to address this issue now. I say that because the government has not given us the opportunity to debate this in the House and to take action on it.

Duff Conacher from the CCRC has explained that past government actions have been ineffective in ensuring that Canada's big banks and other companies are not making excessive profits from gouging customers and cutting services, and they are failing to lend to job-creating Canadian businesses.

I do not know about all members, but most of us now use either Interac or online banking, which would make us think that has led to the loss of many jobs. However, have the related bank charges gone down? Have the credit card charges gone down? Absolutely not. Those costs keep going up. The government had a golden opportunity during the debate on this legislation to address that in a significant way.

Our banking industry has survived because of regulation. While consumer debt is going up and consumers are being penalized by banks because they have no disposable income and are living from paycheque to paycheque and are having to use their credit cards to buy food to put on their table, we know that this government has once again failed to address those high interest rates.

To sum up, there are citizens in my riding who had high hopes that the government would address the key issues facing them. Instead, it has once again turned its back on middle-class, working-class and struggling families and failed to provide them the protection they were looking for in this legislation.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, I really want to thank my colleague for her insightful speech. She has hit it right on the nose in discussing our concerns about the processes used with this particular bill.

As members know, there were some amendments that the NDP actually put forward with respect to the legislation. Of course, the members on the government side are basically not supportive of transparency and efficiency. They are not supportive of controlling foreign acquisitions, which I think is extremely important. My colleague touched on that with respect to the jobs that are going out of the country.

With respect to jobs and foreign acquisitions, could my colleague indicate how important it was that the bill come through the House of Commons and not through the Senate?

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, I want to thank my colleague for her very insightful comments.

I covered this process in my previous speech and again today. Once again, I am at a loss why a government that has experience in this House, and here I would note that it not as if its members were all parachuted in, has so little respect for parliamentary democracy and the processes of this House and why, every single time, it tries to close debate in this House and not follow the process as it should.

In British Columbia, where I am from, we see truckload after truckload of logs leaving our province and with them go the jobs. When I had the pleasure of visiting most of the communities in B.C. in my previous life, I would see whole towns being shut down. Those are not the only jobs that are leaving B.C. When we look at some of the plans for the oil industry, once again a lot of good-paying jobs will be going overseas and we will be creating a lot of $9 and $10 an hour jobs, which is not enough to survive on.

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

Mr. Speaker, in this debate there are few things that we do know. One is that the new leader of the NDP is a supporter of higher taxes on Canadian families. Indeed, he wants to slap a new tax on every banking transaction and appears to be proud of that. To quote directly from his leadership policy platform, he said he would “Make the implementation of a Financial Transaction Tax a key priority....”

Does the NDP member support a new tax on everyday banking? Would a GST hike be next?

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, I see the comment by my colleague as having very little to do with the legislation before us. The legislation has nothing to do with the question he has asked.

However, I will say that I am opposed to the government not addressing the very high interest rates on credit cards and the consumers who are being gouged by banks. I am against the billions of dollars being given to banks in tax breaks. I am against the lack of job creation in the banking industry and the many jobs that are being lost.

I am absolutely against the processes the government uses to mute democracy and to push legislation through this House. I am against the lack of respect for parliamentary democracy.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Mr. Speaker, when the Conservatives introduced this bill, they said it was a technical bill. The fact is that this bill touches on a limited number of issues.

Can the member comment on the failure to address the co-operative sector?

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, I just want to talk about the co-operative banks in my community. I am so impressed by the amazing job they do and the kind of support they give to our youth, to our education system and our seniors.

I actually had the pleasure of visiting the Kennedy Seniors' Recreation Centre last weekend when I was home and saw the amazing things that were happening there. I also talked to a few seniors who were telling me how much they liked going to their co-operative banks and their absolute dislike of high interest rates and the profit-making mantra of the banks.

[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.

[Francine Raynault, NDP, Joliette, QC]

Mr. Speaker, I thank the member opposite for his speech.

I have a question. This bill leaves out an element that is very important to building a stronger economy: regulation of financial speculation and derivatives. Billions are regularly wagered on the stock markets, which destabilizes the economy and does not benefit Canadians.

Should the Conservative government not use this opportunity to work with other governments to put an end to disastrous speculation in Canada and other countries? Is that what the Conservatives intend to do?

[Greg Rickford, Conservative, Kenora, ON]

Mr. Speaker, I appreciate the member's question.

The bill includes measures to update the laws governing financial institutions, measures that will promote financial stability and ensure that Canadian financial institutions continue to function in a business environment that supports competition, efficiency and global stability.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, I listened with great interest to my colleague's remarks today on Bill S-5.

First, in recent weeks when the Minister of State for Finance appeared before the finance committee, he acknowledged that in fact credit for the prudential strength of the Canadian banking system belongs to more than one government. He acknowledged that the stewardship of the previous Liberal government had contributed to the governance of the Canadian banking system, and I am being modest when I say that.

Would the hon. member agree that in fact the Liberal government of Mr. Chrétien and Mr. Martin was responsible for the decisions at the time in the nineties, which resulted in not following the global trend to deregulation, which led to the challenges and the disasters faced by other countries in their financial services sector and the resultant relative strength here in Canada? Would the hon. member agree it was those decisions during that period of time that helped us today?

[Greg Rickford, Conservative, Kenora, ON]

Mr. Speaker, I might be inclined, if it were not for the fact that this member decided to send a standard form letter to the editor of a newspaper in my riding, which was factually incorrect, reprehensible and does not speak to the calibre of person I have come to know him as in this place.

That said, I can speak to this government's record over the past four years in being recognized by major financial organizations and commentaries by editors around the world as being the most sound system. That is what I can account for, having been a member of this place now almost years.

[Gord Brown, Conservative, Leeds—Grenville, ON]

Mr. Speaker, I would like to congratulate the parliamentary secretary for his presentation. He has done a lot of work on this.

The NDP introduced an amendment today that effectively removes the testimonial immunity. That concerns section 212 of the bill.

My question to the parliamentary secretary is: Why can we, as Conservatives, not support this?

[Greg Rickford, Conservative, Kenora, ON]

Mr. Speaker, there are a couple of good reasons. It provides that the Commissioner, Superintendent, officers and employees acting under their direction are not compellable witnesses in any civil proceedings on matters relating to their duties and functions. Providing such limited testimonial immunity would complement OSFI's and FCAC's statutory obligation of confidentiality.

Similar statutory testimonial immunity is afforded to several other regulators in government agencies, including at the federal level, employees of the Privacy Commissioner, the Information Commissioner, the Official Languages Commissioner, the Auditor General and the Ethics Commissioner.

In addition, at the provincial level, it is afforded to employees of Quebec's Autorité des marchés financiers and the Financial Services Commission of Ontario, so this is consistent with that.

I appreciate this important and technical question.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I appreciate the opportunity to address Bill S-5, a very important bill. It has overwhelming support because there is no doubt that all of us recognize the importance of the banking industry.

I will take a couple of different perspectives, one dealing with the consumer's point of view and the other is a macro perspective with regard to borrowing money generally and how important our banking industry is.

First and foremost, from a consumer point of view, one of the things I have known over the years is that consumers of all ages are very dependent on our banking industry. We need to do what we can to protect the interests of consumers, and there is a lot that still can be done in order to address the needs of consumers.

Quite often, government policies have had positive impacts and some have had negative impacts. The biggest negative impact, one for which the government can take full credit, is when it increased the length of a mortgage up to 40 years with no down payment. There was a great deal of concern when the government came up with that bold, some would suggest dumb, initiative because at the end of the day people are concerned about consumer debt and those types of obligations. Forty years is a great deal of time and it is a heck of a way to tie someone to having to make ongoing monthly payments.

When a government sets policies, it needs to be aware of the profound impact they will have at the consumer level. When we look at past consumer debt, we see that it has continued to grow. One of my colleagues mentioned that part of the problem was the type of employment. For many individuals it can be fairly difficult to get the type of full-time employment at the level of pay they were receiving previously and that has put a good number of consumers in very difficult positions. There are many individuals who have fixed incomes and there is a profound impact when banks make decisions that ultimately work against consumers. There are issues concerning credit card charges and banking fee charges at ATMs.

The industry has grown tremendously over the last decade or so and there needs to be more scrutiny on the types of fees that are being levied against consumers. We need to be aware of what is taking place and there should be open debate. I was encouraged when we heard that the Minister of Finance has some interest in terms of consulting with Canadians. However, to what degree he is actually listening to them is another issue. I suggest that we need to connect with average Canadians to get a better sense of the types of hurdles they face when they are in need of money and banking services. Whether they are simple chequing or savings accounts, mortgages, loans or lines of credit, these are all very important issues that affect the day-in and day-out lives of Canadians across our country.

One of the questions I asked the government was with regard to credit unions. I believe that credit unions have picked up a lot of the slack where banks have been falling short. The best example I can give of that is in Winnipeg North and constituencies across this land where bank branch offices are closing and quite often it will be some sort of co-operative or credit union that fills in. Most recently, the Assiniboine Credit Union was established in the traditional north end of Winnipeg.

When bank branch offices close, it has a significant impact on the community because banking is not really optional, especially for individuals who are on fixed incomes, in particular for seniors. Having access to a bank is very important.

When we talk about banking, insurance and the legislation we have now, we should try to highlight the alternatives to mainstream banking, the role they could be playing and what we might be able to do to enhance that role, whether it is further guarantees of deposits or whatever else it might be. The point is that the government needs to demonstrate some leadership on this issue.

I mentioned the macro level in regard to this bill. The actual money we have, the hard currency, coins and bills, is only a small percentage of the entire money supply that Canada has. A vast majority of that money supply goes through our banking and financial institutions, which is why we have a serious responsibility to monitor, regulate and ensure the long-term viability and integrity of our banking industry.

In my short time in the House of Commons, I have found it interesting how both the government and the New Democrats like to assume credit for things that I would suggest is not necessarily theirs to take. It was not long ago when banks around the world were crashing and collapsing. That was because during the 1990s a great deal of pressure was put on the banking industry around the world to lobby governments to deregulate. The argument was that it would provide more opportunities for the banks. Many countries bought into that and it was a heated debate here in Canada. I was at the Manitoba legislature at the time and it was very much a heated debate. I remember meeting with banking representatives who talked about the possibility of amalgamating into larger banks and the benefits of deregulation.

However, fortunately for Canadians, we had Jean Chrétien and Paul Martin, individuals for whom I have a tremendous amount of respect. Most important, it was a very strong majority government with a healthy minister of finance and prime minister at the time who said that we needed to protect the industry and that we needed to ensure those regulations were in place and maintained. That is the reason the banking industry today is the envy of the world.

Speaker after speaker from the Conservative side will acknowledge that Canada is the envy of the world when it comes to the banking industry as a whole. The only part they miss, because they want to assume some of the credit for that, is that it had very little to do with the current Prime Minister. The credit should be going to the former prime minister, Jean Chrétien, the minister of finance at the time, whether it was Mr. Paul Martin or the current deputy leader of the Liberal Party, and those individuals who are still here in the House who participated in that government. There was a great deal of pressure at that time to deregulate. If we a look at the position of the Conservative Party, which was the Alliance Party or Reform Party at that time, it opposed it. It wanted to move toward deregulation. I am glad the Conservatives have had that conversion and now they are very supportive of it.

I thought it was kind of a different type of twist when a New Democratic member of Parliament spoke earlier today trying to assume credit for the banking industry here in Canada, which was a real stretch of the imagination. However, at the end of the day, whether they like it or not, members of the NDP played no role in terms of ensuring what type of a banking industry we have here today.

Hopefully there will be other opportunities to provide comment on that particular issue, if the question does come up. I am more than happy to explain why it is I make that statement.

[Pierre Poilievre, Conservative, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, the hon. member explains that it the absence of government intervention in countries like the United States that permitted the financial crisis to occur.

In fact, the United States government was massively implicated in the U.S. banking system and in the mortgage market in particular. It was the American government that invented sub-prime mortgages, that encouraged banks to offer them, that provided regulations to force banks to provide them and then ultimately backstopped them through government sponsored enterprises called “Fannie Mae and Freddie Mac” which, combined, insured about $4 trillion worth of sub-prime lending.

The reason I mention that is that it is an important distinction from that fact, which is supported by the World Bank report on the question in 2010, and from what the member claims was the cause of the crisis. Does the member not acknowledge that one of the things Canada did right was to refrain from having its government implicate itself in the mortgage market and the lending business the way the U.S. government implicated itself?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I think it is fair to say that there are number of mitigating factors that ultimately led to the crisis situation in the United States. There is absolutely no doubt that regulations had a very significant impact in terms of what actually had taken place.

One of the other things that had a significant impact was the way mortgages were being handed out. That is the reason one could be very critical. One of the first things the member's government did was to establish those 40 year mortgages. That was not in the best interests of the banking industry and the consumers in Canada.

The member needs to reflect on the fact that there were a number of factors that had an impact and caused the banking crisis in the U.S. However, we should not underestimate the importance of deregulation and the importance of making smart decisions, something that his government did not do when it decided in its wisdom to allow for 40 year mortgages. That was a bad decision.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, contrary to what my colleague mentioned a while ago, we played an important role in ensuring that the banking system would be a good system here in Canada because the NDP was the party that opposed the nationalization of the banks.

I want to speak to the bill, because it is extremely important, and to the changes that need to occur. I know my colleague recognizes that there needs to be some changes to the bill because his party supported one of our amendments which would have made it obligatory for the Minister of Finance to consider the net benefit to the Canadian economy as a supplementary criteria for approval.

I am just wondering if my colleague could speak to why this bill should have been dealt with at a House of Commons committee and not a Senate committee?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I give full credit to the member for her attempt at trying to rewrite history. The reality is that during the 1990s, when the debate was hot and heavy, there was a Liberal majority government. I believe the New Democrats had 13 members. The framework, I suspect, was likely not influenced by the New Democratic Party.

I can appreciate that there is this movement lately for the New Democrats to try to proclaim themselves as Liberals but I do not think they will fool Canadians. People will vote for the real thing as opposed to those who want to talk about good liberal policy. We will have to wait and see.

The banking industry as a whole and the regulations, which are important, are things on which the Liberals have a great track record. Not to give up hope, we hope to be able to continue to influence that, not only in opposition but also back in government some day, Canadians willing.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Mr. Speaker, what an interesting debate we are having here, where the NDP are claiming to be Liberals and Liberals NDP. The leader of the NDP was a Liberal and the leader of the Liberals was an NDP. I am confused about it. I am just happy to be a Conservative.

Mr. Speaker, I am pleased to speak today to the House, and to all Canadians, on Bill S-5, the financial system review act. Bill S-5 would make improvements to one of the key components of Canada's economic success, our financial system.

Before I continue, I just want to remind members of the opposition that, unlike in Europe and the United States, not a single Canadian bank collapsed or had to be bailed out by Canadian taxpayers. The reason for this is our strong, stable and flexible financial system. Canada's well regulated financial system is universally recognized as one of the primary reasons for Canada's swift recovery following the global crisis.

Recently, an independent Financial Stability Board peer review validated this claim by praising actions taken by the Conservative government to ensure that Canada's financial system remains strong, enabling Canada to emerge from the global financial crisis in a position of strength.

In its review, the board highlighted the resilience of Canada's financial system, calling it a model for other countries around the world. The board's review said 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 guarantee during the global financial crisis. The report said:

The good performance of the financial system both during and after the crisis provides further evidence of its soundness and resilience.

As the board's report also noted, since 2008, the Conservative government has taken steps to make our financial system more stable, reduce systemic risks and ensure that we have the flexibility to protect the financial institutions when needed. The report went further, citing Canada as an example that other jurisdictions should emulate in developing financial sector policy.

Clearly, these sentiments are felt by jurisdictions around the world. A recent report from the United States congressional research service identified our financial system as a model for others to build on. It said:

... Canada’s supervisory system and regulatory structure have proven less susceptible to the bank failures that have loomed in the United States and Europe and may offer insight for U.S. policymakers.

British Prime Minister, David Cameron, praised our financial system. He said:

[Canada's] economic leadership has helped the Canadian economy to weather the global storms far better than many of your international competitors.

The praise goes even further. Numerous observers have noticed and paid tribute to Canada's well regulated financial sector. For example, 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 best countries to do business. Five Canadian financial institutions were named to Bloomberg's most recent list of the world's strongest banks. That is more than any other country.

At the same time that our system is receiving international praise, we cannot be complacent. Bill S-5 would make necessary improvements to Canada's financial system so it would continue to be the envy of the world.

As Canadians, we are justifiably proud of our financial services sector, which employs over 750,000 people in well paying jobs, represents about 7% of Canada's GDP and is a leader in the use of information technology. We are the world leaders in this field. We aim to keep it that way. It is for this reason that the government has the long established practice of reviewing the statutes governing federally regulated financial institutions every five years. This mandatory review helps to maintain the safety and soundness of our sector.

How would this legislation accomplish these goals? Under the proposed legislation, certain larger foreign acquisitions of financial institutions would need the approval of the Minister of Finance. This merely reinstates some of the historical oversight provisions repealed by previous Liberal governments in early 2001. In practice, it would require ministerial approval if a federally regulated financial institution were to acquire a major foreign entity which significantly increased its assets by more than 10%.

This is a move supported, not only by industry stakeholders, but also by Julie Dickson, the Superintendent of Financial Institutions.

The legislation would also reflect the natural growth of the banking sector by increasing the large bank ownership threshold from $8 billion today, to $12 billion. This would have no impact on Canada's five large banks. They would continue to be subject to widely held requirements. This change would merely reflect growth in our financial sector.

Bill S-5 would also build on this government's proven record of improving consumer protection by making important changes to federal financial institution statutes. In particular, the bill would increase the maximum administrative penalty that the Financial Consumer Agency of Canada could levy from $200,000 to $500,000. It would confirm that Canadians, including bank customers, would be able to cash government cheques of amounts less than $1,500 free of charge at any bank in Canada.

The legislation would also demonstrate this government's continuing support for credit unions. Building on the federal credit union charter, Bill S-5 would amend the Canadian Payments Act so credit unions would fall within the co-operatives class in the act rather than the bank class.

Speaking to this change, the Credit Union Central of Canada, which is the national association of credit unions in Canada, had this to say:

Placing the federal credit union in the cooperatives class will preserve and strengthen the credit union system representation at the CPA. It will ensure that a federal credit union will be represented by a director, who speaks for the interests of cooperative financial institutions in CPA matters.

In short, this change would promote a level playing field within the financial sector, which would generate competition in the industry, which would ensure a stronger, more stable system overall. Bill S-5 would also include a number of technical refinements to ensure the effective implementation of what is referred to as a bridge bank tool. This would build on our government's commitment in the 2009 budget to strengthen the authorities of the Canada Deposit Insurance Corporation, to effectively preserve the critical functions of a financial institution in dire straits and to help maintain stability in the financial system.

I would like to finish by saying that it is constant improvements like those included in Bill S-5 that make Canada's financial system the envy of the world. Surely, even the members of the opposition can see that it is the routine fine tuning of Canada's financial institution legislation that would keep our financial system strong, stable and flexible for Canadians. On that note, I urge the members of the opposition to stand and support the swift passage of this very important legislation.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, I appreciate the comments from my colleague. Certainly there are some really good points with the bill and we do support the bill. However, we think there need to be some amendments, amendments which would talk about transparency. We know that the government is not quite supportive of transparency because we have seen all the hogwash that has been happening since the election of May 2011.

In any event, I want to touch base with my friend. This is an extremely important bill. Does he not think that it should have had more time for debate, that it should have had more time at committee, and that it should have gone to a House of Commons committee as opposed to a Senate committee?

Let us not forget that only three sessions, four hours to examine the bill, one session with officials from the Ministry of Finance and one session for witnesses, and a two hour session for a clause-by-clause review, is really not enough for a bill this size, not to mention the fact that some of the witnesses have been anonymous.

I would like him to talk about the process and the fact that this is an extremely important bill and has not had due respect.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Mr. Speaker, this process and the consultations have been in place since 2010.

The sunsetting clause, the sunsetting of the legislation this year, makes this important legislation to come to the House today, not only to ensure that we give it its due diligence, but to ensure that we pass it.

As for significant amendments to the legislation, as I said in my speech and has been said by members on both sides of the aisle, the banking system that we have in Canada is one of the best in the world. It is recognized around the world as one of the strongest banking systems there is. It is one of the reasons why we did not have to bail out the banks in our country as has happened in the United States, England and other countries around the world. It is very important that we continue along this line, without adding substantial amendments that the NDP would like to put in place.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Mr. Speaker, a couple of interesting points have been raised in the debates today.

I would like to get clarification from my colleague across the way. Traditionally a bill of this type would be generated and would come from the government. Why in this particular case is this a Senate bill? Why would it have been started in the Senate and taken this approach, this path?

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Mr. Speaker, I have been listening to many of the speeches given as well as questions and answers in the House today.

I am glad the hon. member for Cape Breton—Canso stood up so that I could talk about his question. There are also some ideas he has been proposing on a 40 year mortgage, which he continues to throw out there. At the end of the day, he constantly forgets to mention the fact that it was this government that took the prudent steps to decrease the maximum mortgage period from 40 to 35 years down to 30 years, and also to lower the maximum amount lenders can provide when refinancing mortgages to 85%.

The other part the hon. member for Cape Breton—Canso constantly forgets is that he voted against all these changes that were made. I hope that, in the spirit of co-operation, he will stand up and finally support the Canadian financial sector and those Canadians in my riding who depend on common sense decisions, not just partisan rhetoric.

[Kevin Sorenson, Conservative, Crowfoot, AB]

Mr. Speaker, I want to thank my colleague from Alberta for the great speech he gave. I do not know if he had the opportunity to watch any of the NDP convention this past weekend. It seemed that when they were not attacking the oil sands of Alberta, they were attacking banks. If they were not attacking jobs and trade, they were attacking banks. If they were not attacking banks, they were attacking the oil sands in Alberta.

In fact, it was written in today's The Edmonton Journal that in this new leader's world, “the oilsands are to blame for all that is wrong with Canada's economy, full stop”. Also in the new leader's policy book, in dealing with banks and bank transactions, he wrote he would “make the implementation of a financial transition tax a key priority”.

Could my colleague explain to us the ramifications this would have on the economy now, where every individual who concluded a banking transaction would now be faced with an extra service charge so that big government could become bigger, and that big bureaucracy could become bigger? How would that hurt our economy?

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Mr. Speaker, as we all know, the members from the other side, whether they are in the official opposition or the third party, have never seen a tax they did not like to implement, and have never seen a bureaucracy they did not like to increase.

At the end of the day, with the amendments that have been brought forward, the viewpoint of the leader of the official opposition and other members on that side is that we actually need to change our regulatory system. We need to move more to a nationalized system. We need to start taking over some of these banks so they can have more control. I think that is a very dangerous road to go down.

Our system has proven to be successful, the best in the world. I do not know why the NDP members would want to change this. It makes as much sense as their constant attacks on the oil sands in Alberta, which provide hundreds of thousands of jobs and billions of dollars of investment in our country.

All I ask is that the other side start looking at some of these things in the spirit of co-operation and what is best for Canadians, not just what is best for their—

[The Acting Speaker, Bruce Stanton]

Unfortunately, we have come to the end of the time allocated.

Resuming debate. The hon. member for Brossard—La Prairie.

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

Mr. Speaker, I am pleased to rise to speak to Bill S-5 to amend our financial system. I am a member of the Standing Committee on Finance, which examined Bill S-5.

A member across the floor mentioned the sunset clause. Indeed, this system should be reviewed every five years, but our problem with the government is that it is improvising on this issue. It passed this bill in the Senate with very little public consultation, then it used the date when this review is supposed to take place as an excuse for not accepting any of our amendments. This proves that the government did not take this bill seriously and did not do its homework.

As we all know, our financial system is very important. I am a notary and lawyer and, before I was elected, my clients included Canadian banks, some of them in Montreal. Our banking system is important to our economy. However, this bill overlooks consumers. People have to assume the cost of the banks' excesses, and this has not been taken into account at all.

Nor does this bill take the global crisis into account. I am not making this up. Many believe that the crisis originated in the financial sector, primarily in banks in the United States, which had an impact the world over. There was an opportunity to do something here, but once again, this government improvised and did not take the steps that should have been taken.

The members across the floor say that we on this side of the House are idealists. That is true, but we are also pragmatic. We proposed real solutions. It is true that this bill has little impact. It contains technical revisions and deals with minor administrative concerns. However, we are worried about one point: the acquisition of foreign banks by Canadian banks.

A system was introduced a few years ago, establishing the Office of the Superintendent of Financial Institutions, which is responsible for assessing these transactions. When a Canadian bank acquires a foreign bank, it affects our economy and our financial system. We want such acquisitions to be truly beneficial for our economy. The Office of the Superintendent of Financial Institutions should have been mandated to study such purchases and make recommendations, perhaps even give its approval. However, Bill S-5 puts this power in the hands of the minister. This poses a problem.

This power used to belong to the minister, but was given to the Office of the Superintendent of Financial Institutions in an effort to depoliticize the process and avoid having a minister be influenced by his connections or lobbyists and make a decision that would defy the financial system and what had been proposed. Now, the Conservatives, who claim our system is working, are in the process of reversing the decision and giving the power back to the minister.

Some of the ministers across the way have very close ties to lobbyists. The Minister of the Environment, to name one, does more to promote lobbyists than he does to protect Canadians in this regard. The concern here is what might happen with the Minister of Finance. Without pointing the finger directly at this Minister of Finance, putting this power back into the hands of a minister makes the decision very political and problematic. What is more, there is no requirement to provide public explanations. The Office of the Superintendent of Financial Institutions could say that a certain transaction is not beneficial to Canadian financial institutions and, without providing any explanation, the minister could ignore that decision and make his own decision.

The process is becoming very political and that is worrisome. What is happening in the United States is a result of the deregulation of the system. The Conservative government is doing the same thing here. That is one of our major concerns. We are being told that all we want to do is make proposals that will only delay matters. Yet the amendment we proposed was quite simple.

We did not have a lot of time to debate it because the government once again decided to move quickly and push things through.

We had asked the minister, when he makes a decision, that he not just look at the criteria that are good for the Canadian financial system—that is important and we would not take that away—but that he also look at the criteria that are good for the Canadian economy. Unfortunately, that amendment was rejected. It is very hard to understand why.

When a Canadian bank takes over a foreign bank, some people think that this must also be good for the Canadian economy. Unfortunately, our amendment was rejected. It is very difficult to understand. I wonder what this means. I have to interpret this myself, because the government was not very clear on this subject. All that matters to this government is the financial system, not the Canadian economy. Yet they cannot be separated. It is important to discuss the financial system, but we must also discuss the impact that it can have on the Canadian economy. In a way, this shows that the government wants to hold on to power and wants to make a decision its own way, once again without explaining why it is moving in this direction. With this bill, the Conservative government is again showing its lack of transparency. It wants to politicize the matter and does not want to explain to Canadians what is happening in this regard. We asked for further information, but unfortunately we did not receive it.

I will now address another matter. We know that this bill had to be introduced. However, the government is once again being criticized for its lack of vision because it had a golden opportunity to reform the banking system. I do not think that this government can pat itself on the back for that. In addition to reviewing the banks and financial institutions, the impact on consumers should have been considered as well.

We now know that the government's job creation strategy is to give tax breaks to big business, including the banks. Does that create jobs? It remains to be seen. We do not believe it does, as indicated by the statistics on job losses and unemployment. Despite this, banks have not lowered their interest rates, even though the prime rate is at an historic low. And that is not all. After receiving tax breaks and making billions of dollars in profit, the banks are now increasing their fees.

Look at what is happening. Consumers have contracts with banks or have bank accounts. They borrow money and proceed as usual. It is a bit like the gas situation. We cannot get out of it. People are a bit dependent on the system, on the bank. The bank can do what it wants. Despite the fact that interest rates are very low, credit rates have not changed at all. Who is reaping the benefits? The banks.

Banks are increasing their fees and it is not consumers who are benefiting. That is what we are telling the government. The members opposite need to be aware of this because they too represent constituents who are consumers. The government must not be so single-minded. It makes for a very unbalanced approach. Once again, this is a problem that we have with the government, that it is too single-minded and is not looking at how what it is doing will affect the entire system, whether we are talking about tax cuts for large corporations or the banking reform that it may or may not implement. This affects consumers. We are asking the government to take a broader view of the situation and to look at what is happening in this respect.

If we were to ask any of the members opposite whether any of their constituents are being negatively affected by this, I think that they would say yes. We do not even need to ask. We simply need to look at the figures. The OECD will tell them, and so will economists. Household debt is a problem. It has reached a record high of 151% in Canada. This means that for every dollar a family earns, it owes $1.51. The record level of household debt is a problem. Yet, unfortunately, the government is not doing anything about it. This would have been a good time to do something, but unfortunately, once again, the government is demonstrating its complete lack of vision. This is a missed opportunity.

This government is bragging and saying that the system is working well and that everything is fine, but I think that the government must be really out of touch if it does not see that people are suffering. This would have been a good opportunity to help consumers and families. Unfortunately, the government did nothing in this respect.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, my colleague obviously understands the difficulties people are experiencing and the challenges ahead. We all know the importance of the bill. Therefore, I would like the hon. member to comment on some of the witness testimony.

Tyler Sommers said:

—Canada's big six banks have reported new record first quarter profits totalling $7 billion (up 5.3% compared to 2011) while raising banking fees and cutting jobs in the sector...

Duff Conacher from the CCRC explained:

Past government actions have been ineffective in ensuring Canada's big banks and other companies are not making excessive profits from gouging customers and cutting services and failing to lend to job-creating Canadian businesses.

Could he comment on how important it is for us to at least put in place the amendment the NDP has put forward, which talks about transparency and accountability?

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

Mr. Speaker, I would like to thank the hon. member for her question.

This is indeed a problem. As I was saying, I worked with banks before becoming a member of Parliament. I did business with people who worked in banks. Many of these people voted for me. Why? They did so because a balance is needed. Even the people who work in banks will say it: consumers are paying a high price. This is a problem, and what the hon. member said is completely true.

According to Duff Conacher, the coordinator of Democracy Watch and chair of the Canadian Community Reinvestment Coalition, past government actions were too little, too late to ensure Canada's big banks and other companies were not making excessive profits from gouging customers.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I believe the member indicated he may have worked for a bank or was familiar with individuals who worked for one. I am unclear on that point.

If the member did work for a bank, what are his opinions on the user fees that are charged, for example, ATM charges, interest rates, withdrawal/deposit charges? Does he have a personal opinion that he could share with us?

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

Mr. Speaker, for clarification, I did not work for a bank. I am now in the House of Commons, but I used to be a corporate lawyer and I worked with banks. People who voted for me worked in banks, so I am familiar with what happens in the financial sector.

Even people who work in banks will tell us that there has to be a certain balance. When a bank is making billions of dollars in profit and it is gouging the consumers, people are not going to be happy. They understand that balance.

Unfortunately, at one point, they are even asking the government to regulate on some of those issues. We in the NDP are saying that interest rates on credit cards have to be capped and we have to put a cap on the excessive fees that banks charge.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Mr. Speaker, I would like to thank the hon. member for his speech. I would like him to elaborate on the connection between the financial system and the Canadian economy.

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

Mr. Speaker, I would like to thank the hon. member for Saint-Lambert for her question.

We did not put forward an excessive number of amendments to this bill. The amendments merely served to connect the approval of the department or minister to the Canadian economy, to show that there is a link between them. If we consider only the interests of financial institutions and not the interests of our country's economy, the approach will be unbalanced. We simply want the minister to also consider the Canadian economy when making decisions. Unfortunately, the Conservatives rejected the amendments.

[Robert Goguen, Conservative, Parliamentary Secretary to the Minister of Justice]

Mr. Speaker, my hon. colleagues have discussed many of the important features of Bill S-5 which would strengthen Canada's financial sector to its advantage. I particularly appreciate my hon. colleagues' characterization of the financial system as being only as strong as its weakest link and for outlining some of the key areas where the government has acted, both within Bill S-5 and elsewhere, to strengthen those links that needed the most attention.

The banking sector has expressed its strong support for this mandatory legislation. For example, Terry Campbell, president of the Canadian Bankers Association has explained, “In Bill S-5, the government has stepped up to the plate and is proposing what we think are very needed clarifications”.

I also agree with my colleagues' emphasis on the importance of considering the health of the whole financial system as fundamental to the growth and success of the entire economy. With this in mind, I would like to dedicate my allotted time to considering one special crucial link in the system which Bill S-5 would act to fortify, and that is Canada's payment system.

Our payment system is the set of instruments, procedures and rules used to transfer funds among financial institutions, either on their own behalf or that of their customers. This is not to be confused with the various other payment instruments Canadians use, such as cash, cheques, debit cards and credit cards to purchase goods and services, to make financial investments and to transfer funds from one person to another. The two are not unrelated, however, because these payment instruments, with the exception of cash, normally involve a claim on a financial institution such as a bank, credit union or caisse populaire. Financial institutions therefore need arrangements to transfer funds among themselves, which is why the payment system exists.

In Canada, the national systems for clearing and settlement of payment are run by the Canadian Payments Association, also known as the CPA, a not-for-profit organization of federally regulated financial institutions. This system has served Canadian financial institutions and their customers well. However, in a world of ever-changing demands, technological innovation, increased global integration and competition, no responsible and effective government can afford to let such a system remain static. That is why Bill S-5 takes action to ensure that this system can meet the ongoing demands of an increasingly dynamic, innovative and globalized financial system. I must note that the CPA provided input on these measures through an open public consultation process and has told the House finance committee that it welcomes ”the incorporation of technical and housekeeping amendments to the Canadian Payments Act legislation to provide greater clarity surrounding our membership”.

It is clear that the payments landscape is changing. For example, since 1996 we have seen in Canada and abroad increasing cases where clearing and settlement systems do not include banks as direct participants. To better accommodate this development, Bill S-5 proposes to amend the Payment Clearing and Settlement Act to remove the requirement that there must be at least one bank involved. The new definition would allow more flexibility in establishing systems to clear such complex financial instruments as over the counter derivatives, or OTCs. This change has the added benefit of allowing the Bank of Canada to oversee the transactions of these complex financial instruments to help ensure they pose no systematic risk to the financial system. Not only is this prudent, it is also in keeping with Canada's commitment to our G20 partners that by 2012 our OTCs be cleared through central counterparties.

Bill S-5 also proposes to change the Payment Clearing and Settlement Act to allow the Bank of Canada to disclose information to other regulators of payment clearing and settlement systems and to coordinate activities across current federal and provincial jurisdictions as well as with foreign regulators. This would also help us meet our G20 commitments by ensuring that Canadian prudential and market conduct regulators have the authority, tools and information they need to maintain effective ongoing oversight over the Canadian OTC derivative market. Moreover, the information sharing would help all parties understand the potential risk in these linked systems, building upon lessons learned from the 2008 financial crisis and helping in our efforts with our international partners to prevent such instances in the future. Failing to form such links could actually delay our ability to link to foreign systems and undermine Canada's ability to meet the commitments all G20 nations made. This is a key fact for hon. members to consider when debating the timely passage of Bill S-5.

If that does not convince hon. members to get behind the bill, I will offer another good reason.

As many hon. members appreciate, Canada's credit unions are a valuable source of financial services in communities across the country. In recognition of the important role credit unions play, in budget 2010 our government created a new legislative framework for federal credit unions to accommodate growth and expansion of the Canadian credit union system, putting them on a more level playing field with other financial service providers.

Once implemented through regulation, this would enable those credit unions that choose to do so to extend beyond provincial borders and pursue business strategies that are not limited by provincial incorporation. This change would encourage competition among financial institutions and promote a more level playing field within the financial sector, supporting a stronger and more stable system overall. It would also give credit unions a way to expand their sources of funding and diversify their geographic risk exposure.

Bill S-5 supports these efforts by amending the Canadian Payments Act so that credit unions fall within the co-operatives class in the act rather than the bank class, giving federal credit unions a more effective voice in the CPA. I am pleased to report that this measure has been very positively received by the federal credit unions.

According to Credit Union Central of Canada, the national voice for credit unions across the country, these changes would help credit unions represent their members more effectively at the payments table.

In the words of David Phillips, president and CEO of Credit Union Central:

Placing the federal credit union in the cooperatives class will preserve and strengthen the credit union system's representation at the Canadian Payments Association. It ensures that a federal credit union will be represented by a director who can bring the perspective of cooperative financial institutions to CPA matters.

At the same time, credit unions would still enjoy the long-standing, well-understood and robust governance, liquidity and clearing and settlement frameworks that they use today.

For these reasons, I would encourage hon. members of the House to support the timely passage of Bill S-5. They can do so with the confidence that by making these important improvements to Canada's payment system they will be strengthening key links in Canada's financial system and better connecting it with the world.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, we are debating Bill S-5. However, we are also debating part of the amendment that was tabled.

Let us be very clear. The amendment talks about the fact that the immunity resulting from this provision could negatively impact the office's transparency and accountability to the Canadian public with respect to Bill S-5. That is why we have tabled it, to talk about transparency and accountability, which it is obvious the government is not willing to support.

This bill was pushed through the Senate. It is such an important and crucial bill when it comes to the well-being of finances, not only of the banks but of Canadians as a whole. Why is it that the government will not support an amendment that would assure transparency and accountability, and would also prevent the time lost as a result of frivolous civil lawsuits?

[Robert Goguen, Conservative, Moncton—Riverview—Dieppe, NB]

Mr. Speaker, we believe that the legislation when read in its entirety has all the elements of transparency necessary to ensure the best protection of the public. Consumer protection is at the heart of this very legislation.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, why did the government choose to bring in Bill S-5 through the Senate as opposed to the House of Commons?

It seems that the government's attitude, as has been demonstrated on other pieces of legislation that have come before the House, is to minimize the contributions of members of Parliament on legislation.

We all acknowledge that this is very important legislation and it will pass. Why is it that the government continues to look at ways in which to minimize input and debate in the House of Commons where that debate should be taking place on all legislation as much as possible? Why bring it in through the Senate as opposed to the House of Commons?

[Robert Goguen, Conservative, Moncton—Riverview—Dieppe, NB]

Mr. Speaker, the House has a very busy agenda and has very capable members, as does the other house, the Senate, which is equally capable of coming up with a very well crafted bill such as Bill S-5. In its field of competency, it has come through with what we feel is a very good piece of legislation.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, my colleague made a couple of comments toward the end of his speech about putting credit unions in the co-operatives class. As he would know, there is a tremendous amount of importance around credit unions in New Brunswick which service our rural areas. In come cases, if it was not for credit unions, there would not be any banking services in the rural areas.

I would like the member to take a minute to comment on the competitive aspects and what this is doing for credit unions in allowing them to continue to build strength in our rural areas.

[Robert Goguen, Conservative, Moncton—Riverview—Dieppe, NB]

Mr. Speaker, credit unions play a very important role in Canada's economy. Many of the credit unions are in the smaller areas where the bigger banks have pulled out because of lack of population. The fact that they are now becoming full members of this competitive process will benefit consumers. We know that credit unions, being of a smaller nature, pay very much attention to their members. They will offer more competitive rates. This will sharpen the pencils of the bigger banks which are sometimes subject to criticism.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a pleasure to rise here today on Bill S-5 and the amendments that the NDP has put forward with regard to creating more transparency and accountability in this bill.

We do support the bill. However, we see this as a missed opportunity because there are so many issues relating to the banking industry right now that affect Canadian consumers, and also Canadian companies. I was at committee today and so I do not know if this has been discussed a great deal here, but small and medium size businesses have been hurt exponentially by the banking system in recent years. I will get into more detail on that later, but it is important to put that as part of the equation as we talk about this missed opportunity here.

First, as my colleague from the Liberal Party noted, the bill comes from the Senate. That is a concern for us. Why would the government table a bill in the Senate and then have it come to the House of Commons? A Conservative called the Senate equally capable. That is an interesting description for the Senate coming from the Alliance/Reform Party base out there when senators are unelected, unaccountable individuals.

While there are some very good people in the Senate who do some good work, at the same time they are not elected and not accountable to the Canadian people. Therefore, I do not think the Senate is equal to the House in any sense whatsoever. I am shocked that a Conservative/Reform/Alliance person would call the Senate that, because senators are political patronage appointments made by the Prime Minister, whether that be Joe Clark at the time, Pierre Trudeau, Jean Chrétien, Paul Martin or now our current Prime Minister.

Senators do not have to go to the electorate and earn their seat. Once again, there are some very good people there whom I have worked with on a lot of good issues and I respect them a great deal, but there is a big difference between them and having to go to the person checking out groceries and selling cars. They are our bosses. They are the ones who decide whether we get to this place or not.

Having said that, I am a little concerned that the bill is from the Senate. I say this because in the past I worked on Bill C-393, a bill on providing generic drugs to developing countries for tuberculosis, AIDS and malaria. The House of Commons passed it, but it actually died in the Senate. Thus the elected body here passed a bill, sent it to the Senate, but it never made it through, even though it should be Canadian law right now so that we could provide medicines to those who are suffering from tuberculosis, malaria and AIDS in developing countries. There was also the bill from Jack Layton, the climate change bill, that was passed in this House of Commons, but, again, did not make it out the door of the Senate.

Now we have the reverse coming back here and what we see is a very scoped bill on the banking industry. However, I am glad that the Conservatives are dealing with this. The government is actually addressing some component of it, but let us take a step back in history, which I think is very important.

It is interesting that representatives of the banking industry came into my office a year ago and said that I should be thanking them for the work they had done and the fact they had propped up the Canadian financial system because of the way banks were structured and had done business. At that point, I asked if they wanted me to go to my computer or to my filing system and pull out all of the presentation decks and summaries they had previously provided me saying that they had to become like the American banks.

It was the New Democrat members in the House of Commons who fought against that. I will admit there were some Liberals who did so too, because I have been corrected in the past on this, and quite sincerely, by some of my Liberal friends. However, it was John Manley under Paul Martin who was trying to move our banks towards the American model. We voted against that and stopped it and it did not pass the House of Common, as there were some others who supported that notion to keep our banks the way they were. However, it was certainly the Conservatives, the right wing members, who got up day after day to complain about how Canadian banks would be swallowed up by U.S. institutions if we did not act at that particular time. That took on—

[The Acting Speaker, Bruce Stanton]

On a point of order, the member for Bourassa.

[Denis Coderre, Liberal, Bourassa, QC]

Mr. Speaker, there is an issue called relevance.

The claim that Jean Chrétien's government wanted to deregulate banks is completely false. I was part of that government. I would like us to render unto Caesar the things which are Caesar's. We are in this situation because a Liberal government protected our banks so that we did not become a copy of the American model.

[The Acting Speaker, Bruce Stanton]

First of all, I thank the member for Bourassa for his intervention. The second part of his intervention related more to debate on the facts. I would say, however, and this has been a point of possible interest through the course of the day today, that the debate, the question before the House today, is on the amendment. It is perhaps an opportunity to remind hon. members that while they have great freedom to explore these ideas around the question that is before the House, they may wish to tie those ideas together in terms of how they are in fact pertinent to the question before the House.

The hon. member for Windsor West.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I will keep that advice in mind and return to the amendment.

It was part of the larger framework that we were dealing here, which is why I was trying to connect the two. The assumption or proposition of the banking industry is that they have basically propped up the Canadian economy with their wisdom, whereas if we look at history, there was clearly an attempt to actually to do something different.

However, I will go back to the amendment and the issue related to transparency, which I think is really important. It is important for the bill itself because it shows that there was an attempt to get an amendment that would clearly define where there would be some transparency for the banking industry related to transactions. The bill does actually have some interesting points related to foreign investments and a series of different things.

However, again, it speaks to the point that we have this small amendment that has been denied, whereas the banking industry in its entirety has not been dealt with in this chamber. That is a real problem.

I started my speech here today by noting that the banking industry affects consumers and businesses, and I would like to move to that point, especially the business point because I am not sure it has been addressed here in the chamber. This is a missed opportunity on credit lending and rates, and transparency is important in regard to that, because we need to have real decisions made about the lending practices and percentages.

Let me give an example. We have a successful automobile plant in Windsor that produces Ford products. It has been very good, even during the auto downturn, at expanding itself. It actually feeds into supplier markets and supplier chains that have very important jobs. These jobs are critical because they have value-added elements, but they only pay $15 an hour. In terms of an auto supply market job, their profit margin is very small. The workers make around $15 an hour and get some benefits. Here is the real connection to the banks, because these supplier have had to rely upon government lending versus their own bank, because the bank interest rate margins are so high they actually eat into the profit margins of the auto suppliers so much they actually lose money.

Here is an auto plant that produces parts for the Ford Focus in particular. It has automated itself and has workers that do some manual labour and some industrial labour related to servicing of those, including everything, from windows to doors and a series of things, and it only pays people $15 an hour, along with some modest benefits. There is also low management overhead. However, they are losing money if they have to borrow from the Canadian banks, despite the fact they made $25.5 billion in profits this past year. They have to rely on going to the Canadian Business Development Bank or Export Development Canada to actually borrow the money necessary.

What we are saying here, to conclude, is that we see this as a missed opportunity in the House of Commons to reform our banking industry. It is important for consumers. However, it is also important for the small and medium size businesses that are providing value-added work for the Canadian economy that we are missing out on and losing to the United States and other places right now, because we have a poor financial system that actually does not provide borrowing capacity at the rates necessary to survive in this industry.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, I know that my colleague still had quite a bit to say, so I am going to give him a bit of time to speak some more.

Certainly this is a bill that is moving in the right direction. Maybe my colleague can elaborate a little more on some of the amendments we have attempted to put forward, the one that we actually put forward, and why we need to move down the road of transparency and accountability. This is about democracy, not only for today but tomorrow.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, the amendments on transparency even pertain to avoiding some lawsuits based on the legal systems we have and making sure we do not get caught up in the courts. It is a very modest approach to make sure that we do not spend more money in the legal system for the banking decisions and disclosures that may be necessary for transparency.

I think Canadians want transparency. Right now I am dealing with the Panama free trade agreement, for example, and having transparency in that agreement is one of the things we are seeking to get from the government and the Panamanian delegates. We want them to have financial records that are accountable, so that we can see there is no money laundering or issues related to drug transfers and a whole series of things.

We want transparency. I think most Canadians support that concept.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, I notice that the Toronto Dominion Bank has just recently told seniors that their accounts are no longer free. They have to pay bank fees.

The Royal Bank started it. Now the Toronto Dominion Bank is doing the same thing, which means it has basically told seniors that it is no longer interested in giving them services. That is really unfortunate.

I wonder what my colleagues think about this, that seniors, after serving this country for all these years, are now told they have to pay extra bank fees?

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, as a TD customer since 1986, I am shocked. I did not know that.

It is unfortunate. One has to look at that extra cost, which will not be recovered in the economy. We know the bank is not going to apply that back into the economy but to its profit margin. It will not have the same impact as seniors being able to spend their money on groceries, on day to day living expenses, on prescription drugs and a whole series of things. Those things are now going to be lost to the overall economy.

Seniors' personal budgets are going to have to be stretched, but local economies are going to be stretched as well. We have not seen recent investment out there in regard to the banks' profits. Those profits have not gone back into the Canadian economy by any means.

The user fees are pretty incredible when one thinks about them. User fees are non-value added and are out of control. One of the lower hanging fruits we can actually provide to the Canadian economy is to lower the user fees and expensive service fees, which do not add value, and give them back to workers who are on the ground.

[Pierre Poilievre, Conservative, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, the hon. member says he is against bank profits. Incidentally, his party is also against oil companies making profits. That is a great populist battle cry.

At the same time they claim to be in favour of the pensions of unionized workers. The problem is that pension funds for unionized workers in Canada are overwhelmingly invested in banks and oil companies, which can only pay profits or returns back to those unionized pension funds out of their profits.

Therefore, when the NDP proposes to hammer the enterprises with higher taxes, they are really proposing a tax on the pension funds of the unionized workers they purport to defend.

How does the hon. member reconcile those two conflicting points of view?

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I would ask you to intervene on this. The hon. member just said I was “against bank profits”. I would ask you to check the blues and come to the House about that. I did not say that in my speech, as the transcript will indicate.

I would ask the hon. member to apologize for that. He said I said something that is not true. That is being espoused fictitiously in the House of Commons.

Mr. Speaker, I would ask for your ruling on that, because I am tired of those types of things being used against me. If there is specific language that a member is going to quote me as having used, then please provide that language.

Second of all, I would just conclude by saying that I am not against bank profits; I am against banks gouging. The balance has been lost, and that is what we on this side want to fix.

[The Acting Speaker, Bruce Stanton]

We are going to resume debate, but on the member's question I think it is really just a matter of debate on the facts that have been exchanged here this afternoon.

Resuming debate, the hon. Parliamentary Secretary for Status of Women.

[Susan Truppe, Conservative, Parliamentary Secretary for Status of Women]

Mr. Speaker, I truly appreciate the opportunity to lend my voice to today's debate in favour of the timely passage of Bill S-5, also known as the financial system review act.

While very technical, this is very important legislation. Today's bill is not only the right thing for Canadians but the right thing for Canada's economy. More broadly, Bill S-5 builds upon and complements a range of initiatives that our Conservative government has introduced.

I will discuss some of those initiatives. The housing sector warrants particular attention in light of its role in the 2008 financial crisis and the ongoing pressures arising from the U.S. housing bubble that are still being felt by the American financial system and which have slowed that country's economic recovery.

In order to protect its housing market from the worst excesses seen abroad, our Conservative government has acted repeatedly and decisively to ensure its stability, especially with regard to the mortgage financing. Mortgage financing plays a key role in providing a reliable source of funds to prospective Canadian homeowners. Prudent mortgage lending standards and mandatory mortgage insurance for high ratio loans allowed Canada to avoid the housing crisis that occurred in other countries, especially in the United States.

Since 2008, our Conservative government has taken prudent and measured steps to ensure that this system remains stable over the long term. while maintaining economic growth. In 2008, 2010 and again in 2011, our government took proactive steps to protect and strengthen the Canadian housing market, which included reducing the maximum amortization period for new government backed insured mortgages to 30 years, requiring a 5% minimum down payment and a 20% down payment on non-owner occupied properties, lowering the maximum amount lenders can provide when refinancing insured mortgages to 85% of the value of the property, requiring buyers to meet a five year fixed rate mortgage standard and withdrawing government insurance backing on home equity lines of credit.

Those measures underline our government's continued action to protect the stability of the economy by ensuring lenders' practices are sustainable and the investments of Canadian families in their homes are secure. This would decrease the interest payments of Canadian families by tens of thousands of dollars over the life of a mortgage, helping to improve the financial well-being of Canadian households.

It is important to note that, because of measures like those, Canadians do not face mass foreclosures on their homes and our banks did not require taxpayer bailouts. That is why it is no surprise that Scotiabank chief economist, Warren Justen, said, “...when you look at what exists in Canada, this is still the best country in the world to be in”.

The measures in today's legislation would ensure that Canada's economy remains strong in this time of global economic uncertainty and would give it the flexibility to adapt quickly and easily.

[The Acting Speaker, Bruce Stanton]

Order, please. The hon. member for London--North Centre will have seven minutes remaining in her speech when the House next resumes debate on the question and the usual five minutes for questions and comments.

The House resumed consideration of Bill S-5, An Act to amend the law governing financial institutions and to provide for related and consequential matters, as reported without amendment from the committee, and of Motion No. 1.

Financial System Review Act

[The Speaker, Andrew Scheer]

The hon. parliamentary secretary has seven minutes left to conclude her speech.

[Susan Truppe, Conservative, Parliamentary Secretary for Status of Women]

Mr. Speaker, I appreciate the opportunity to finish this important speech.

This government has also made improvements to Canada's financial system by introducing effective consumer protection provisions for the consumers of financial products.

Unlike the NDP, this government understands the needs of Canadian consumers and has a proven track record of standing up for them. That is why since 2006 this government has protected consumers with new credit card rules that require consent for credit limit increases; a minimum 21-day grace period on new purchases; full disclosure for consumers and limits on other anti-consumer business practices. It has also introduced a code of conduct for the credit card and debit card industry to help small businesses deal with unfair practices, and has banned negative option billing for financial products.

More recently, as part of budget 2010, the government took action by introducing new measures to empower consumers of financial products. These included implementing a new code of conduct on mortgage prepayment information; beginning to implement the recommendations of the task force on financial literacy, starting with the creation of a financial literacy leader in the government; and banning the distribution of unsolicited credit card cheques. That last initiative has been warmly welcomed by consumer groups.

Indeed, at the finance committee, a consumer group stated:

[The government]...touched on the credit card cheques, and the reduced period of access to your money. That's a very good step forward for Canadian consumers, of course. The amount of money that Canadian consumers can access is also a good step forward.

As a result of these actions, Canadians can be confident that they will be provided with clear and relevant information when faced with important financial decisions that impact not only themselves but also their families.

Bill S-5 builds on the government's proven record of improving consumer protection by making important changes to federal financial institution statutes. In particular, this bill increases the maximum administrative penalty that the Financial Consumer Agency of Canada can levy, from $200,000 to half a million dollars; and it confirms that Canadians, including bank customers, are able to cash government cheques of amounts of less than $1,500 free of charge at any bank in Canada.

Again, this is only a continuation of this government's long and proven record in standing up for Canadian consumers.

We all recognize there is always work to be done to ensure the continuing stability of the Canadian financial system and that ongoing vigilance is vital. Indeed, that is why we are pushing for the timely passage of the financial system review act. The renewal of Canadian financial institution legislation on a regular basis has resulted in a robust and effective financial system that is aligned and more responsive to developments in the financial markets and the broader economy.

Moreover, passage of this legislation would maintain the long-standing practice of ensuring regular reviews of the regulatory framework for the financial institutions, a unique practice that sets Canada apart from almost every other country in the world, and one that is supported by those in the industry.

Commenting on Canada's unique practice of having mandatory reviews, the Canadian Bankers Association stated:

We believe strongly in the importance of ensuring that the legislative and regulatory framework is reviewed regularly and for that reason, we were pleased to see that the Bill proposes retaining the sunset clause for financial services legislation at five years.

The Canadian Life and Health Insurance Association stated:

The industry is very supportive of this Bill and urges that it be passed in a timely manner.

Clearly, today's bill provides a framework that will benefit all participants in the financial services sector, both financial institutions and everyday Canadians. As I noted, renewing Canadian financial institution legislation on a regular basis has resulted in a robust and effective financial system that is aligned with and responsive to developments in financial markets and the broader global economy.

In summary, I would encourage all members to join in our efforts to ensure the strength and stability of Canada's financial system and support the financial system review act.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I would like to thank the Conservative member for her speech.

My question is very simple. The Conservatives are saying that this is a very important bill. Basically, it is a review of the financial system. This bill has a major impact on economic stability. We know that the government is very much in favour of a stable economy and that this is something very important.

Since the government considers this bill to be important, can the hon. member tell us why it did not take advantage of this opportunity to conduct more extensive consultation than it did to review the financial system, as presented in this bill? Why did it not take this opportunity to engage in more extensive consultation?

[Susan Truppe, Conservative, London North Centre, ON]

Mr. Speaker, our government began consultations in September 2010. We received 30 submissions from a wide range of groups, and the hon. member also knows that the review is mandatory and takes place every five years. I would encourage the hon. member and all of the opposition to do the right thing and stand up for consumers and support this legislation.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Speaker, could the member for London North Centre comment further on how this bill would affect constituents and Canadians who require financial products and services.

[Susan Truppe, Conservative, London North Centre, ON]

Mr. Speaker, our Conservative government is making a number of changes to the federal statutes for financial institutions that will enhance the protection of consumers and financial services. These changes will confirm that Canadians, including bank customers, are able to cash government cheques in amounts of less than $1,500 free of charge at any bank in Canada and will increase the maximum penalty for a violation of the consumer provision consistent with penalties for other violations under financial institution statutes.

[Colin Mayes, Conservative, Okanagan—Shuswap, BC]

Mr. Speaker, I ask my hon. colleague from London North Centre why the large bank ownership threshold has been increased.

[Susan Truppe, Conservative, London North Centre, ON]

Mr. Speaker, in 2001, the Government of Canada established a widely-held requirement for large banks. In 2007, our Conservative government increased the threshold from $5 billion to $8 billion to reflect the growth of large banks. Since then, the sector has continued to grow. To reflect that growth, the large bank threshold is being increased from $8 billion to $12 billion.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, it is always a pleasure to rise in the House to speak about Bill S-5, the Financial System Review Act, on behalf of all the people of LaSalle—Émard.

One can no longer look at a newspaper without coming across a headline about household debt in Canada. If the storm unleashed by the 2008 laissez-faire financial crisis did not hit Canada as hard as the United States, it is because of the way our financial sector is regulated.

There is an urgent need to maintain and reform the regulation of our financial institutions. In order to do so, the House must firmly commit to getting Canadians involved in the review process and thus help to protect the public, ensure the transparency of our financial institutions and promote the independent review of acquisitions. Finally, we must engage in public consultation to allow various stakeholders—more than just 30 or so— to express their opinions on the impact of the changes proposed by this bill.

I therefore address my remarks to the people of LaSalle—Émard to explain my position on the bill to amend the legislation governing financial institutions.

This Senate bill amends not only the Bank Act, but also 12 other acts. My colleagues in the official opposition have already described several technical aspects of the changes to regulations in the financial sector. I would simply like to go over some of the main points.

Under Bill S-5, large foreign acquisitions will require ministerial approval. The bill will raise the widely held ownership threshold for banks from $8 billion today to $12 billion.

Henceforth, banks controlled by foreign governments will be able to hold a minority interest in Canadian banks and financial institutions.

The bill enhances and expands the supervisory and enforcement powers of the Financial Consumer Agency of Canada.

Lastly, the bill tightens measures to prevent tax evasion in the case of Canadians who do business with subsidiaries of foreign banks.

That said, this bill raises a number of concerns. First of all, why did the government give the Senate, which is full of defeated Conservative candidates, the task of introducing a bill on an issue as important as the review of legislation governing our financial institutions?

Second, will the government give the members of the House the time needed to carefully examine this bill?

To deliver a bill that shows that it truly cares about protecting Canadian consumers, the government must consider adopting measures that are not currently in this bill. Here are some examples: approving large foreign acquisitions of financial institutions cannot fall solely to the minister, as set out in this bill. Such important decisions should be made by the Office of the Superintendent of Financial Institutions without any political interference.

We need to introduce regulatory mechanisms for the banking and financial sectors that are transparent in practice, and not simply in principle. This means we should examine the possibility of regulating all hidden costs and making their disclosure mandatory.

It is also crucial that the committee responsible for reviewing the legislation governing our financial institutions hear from witnesses who are experts on risky mortgage loans, which are of concern to the Governor of the Bank of Canada.

As elected representatives, we have a duty to protect consumers and our constituents. When Canadian financial institutions announced profits of $25 billion last year, debt had become a ball and chain for Canadian households. And if the debt being carried by Canadian households is the ball, middle-class wage stagnation, usurious interest rates, high service charges and incomprehensible loan agreements are what keep Canadians chained to those debts.

Unfortunately, too many people in my riding are among the ever-growing number of Canadians who are burdened by debt. The Association coopérative d'économie familiale du Sud-Ouest de Montréal, with which I met last fall, is on the front line and works with residents of southwest Montreal to find ways of improving their consumer practices and their spending. When people’s wages are stagnant, when their incomes are declining and their debts are piling up, things get more and more difficult.

That organization and the members who work there have heard every story. The people who come to see them are living in dread of the bailiffs who call them at all hours of the day trying to collect. They can no longer sleep at night and they shut themselves away during the day. Some of them have no choice but to consider declaring bankruptcy. The distress is real, and protecting our fellow Canadians must be our first concern.

The most important recommendation I have to make is that the government should use the review of our financial institution legislation to ask what Canadians think and find out what they are concerned about and what issues are of concern to them. In that regard, the government would do well to learn from the best practices developed by the NDP. For example, the NDP has just completed public consultations throughout Canada to find out what Canadians’ concerns are when it comes to the cuts the government is planning to make to the old age security program.

We organized local forums from coast to coast so the people who elected us could talk to us about the impact those cuts would have on them and their family members. For example, very recently, in Ville-Émard, we organized a public forum on reform of our pension system. We had a full house, and we met with 100 of our constituents who were worried about the government’s consistently vague allusions to the cuts it is planning to make to old age security. Our constituents spoke out and we listened to them. The NDP invites dialogue, and the government should do the same when it examines the legislation related to the regulation of financial institutions.

With that in mind, I would have preferred that this bill be drafted after a broader public consultation had been held. In spite of the concerns I have raised, I am going to support the bill, which still represents an adequate review of the financial system. I hope that committee members will have an opportunity to make the amendments that are needed so that the bill will be even more acceptable to Canadians.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Mr. Speaker, this week I received a document for one of my credit cards indicating that the interest rate was going to increase to 29.5%. That is almost 30%. It makes no sense.

Does my colleague believe that the government could have extended its study to speak to people like us who have to pay nearly 30% interest on their credit card and who might have some suggestions to make on the matter?

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, that proves the point I was making in my speech. Quite often, as consumers and citizens, we have responsibilities. However, that responsibility has to be shared by the credit card companies and the banks. There need to be clear, transparent rules. We owe it to our constituents to have rules that are transparent and clear and not hidden and misleading.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I was listening with great interest about how my colleague has been consulting her constituents about this issue and about how these cuts will affect their lives.

I was very interested in what she had to say about co-ops, which are really an important and very under-valued part of society in the banking structure. I am just wondering if the member could elaborate a bit more on her thoughts in terms of how co-operatives and co-ops contribute to the financial side of our economy?

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I want to thank the hon. member for that very apt comment and for raising this very important point.

We forget that a much broader co-operative system existed at one time and that, increasingly, we are turning to mega-institutions where people feel like a number and somewhat powerless in dealing with these giants. The establishment of co-operative systems would give people the power to establish fair and equitable rules for everyone.

[Mathieu Ravignat, NDP, Pontiac, QC]

Mr. Speaker, I thank my esteemed colleague for her very interesting remarks.

Perhaps, like me, she wonders why the Conservatives have not considered the possibility of regulating fees charged to consumers for the use of ABMs or the possibility of re-evaluating hidden fees. Why does their bill not require banks to disclose all of their fees?

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I thank my colleague for his question. Those are excellent questions. We are still wondering why certain transactions are so expensive. Lack of consistency and transparency is causing general confusion. All Canadians are suffering as a result because we have to pay fees that are often hidden, unfair and costly.

[The Acting Speaker, Bruce Stanton]

We have time for a brief question and answer. It looks like there are no more questions.

Before we resume debate, it is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Etobicoke North, The Environment; the hon. member for London—Fanshawe, Seniors; and the hon. member for Cardigan, Fisheries and Oceans.

Resuming debate. The hon. member for Winnipeg South.

[Rod Bruinooge, Conservative, Winnipeg South, MB]

Mr. Speaker, I appreciate the opportunity to speak to this important bill.

Today is a very opportune time to be actively pursuing the passage of Bill S-5, An Act to amend the law governing financial institutions and to provide for related and consequential matters.

Our government undertook a review of our financial sector and the legislation that governs it with the understanding that we live in an ever-changing world of evolving technology and financial sector innovation. The technical measures contained in this bill would ensure that Canada's financial sector regulatory framework stays ahead of the curve and accommodates these developments by mitigating risks, creating new opportunities and helping Canada's financial sector maintain its international reputation as a world leader in terms of its strengths and stability.

I am pleased to report to the House that this legislation was undertaken after a lengthy period of time of open consultation with Canadians from coast to coast to coast to ensure that Canada remains a global leader in financial services and maintains its sector advantage. This financial sector advantage is fundamental to Canada's remarkable economic performance throughout the global financial crisis of 2008. In our world-leading recovery from that episode in terms of jobs and growth, our advantage underpins this overall health that is found in our economy. That is why, in the wake of the financial crisis, our Conservative government took action to modernize the authorities of the Bank of Canada to support the stability of our financial system. This would allow the Bank of Canada to redistribute wealth and liquidity to financial institutions, buttressing them against the immediate aftershocks of the crisis and maintaining the vital flow of credit to Canadians and businesses during the so-called credit crunch.

While many foreign banks had difficulty raising capital on global financial markets during the crisis, Canada's financial system remains stable, well capitalized and underpinned by one of the most effective regulatory frameworks in the world.

Then, to further safeguard our financial system moving forward, we introduced measures in budget 2009 to strengthen the authorities of the Canada Deposit Insurance Corporation. This enhancement would contribute to the financial stability and protect insured deposits by giving CDIC a great variety of tools to manage the resolution of a troubled financial institution. An important element of this change is that it would allow CDIC to establish a bridge institution, known in the trade as a bridge bank, to preserve the critical functions of a financial institution facing trouble and to help maintain overall financial stability.

Among other things, Bill S-5 is important because it includes a number of technical refinements to ensure the effective implementation of this bridge bank tool and it includes other measures that would contribute to financial stability.

We have seen all too clearly in recent years how heavily interconnected the structure of global finance has become, and this can pose unintended risks here at home, which is to say that bad or risky decisions can have repercussions that can travel right around the world and land back on our doorstep with a lot of unpleasant financial consequence in tow, and not just for the banks but for the people and businesses who depend on them. All governments have an obligation to weigh these risks. This is particularly important as Canadian banks expand into foreign markets and foreign players similarly enter the Canadian market. With Bill S-5, the Canadian government would have another tool at its disposal to take action when it considers these risks to be unacceptable.

In short, the bill would reinstate the requirement for significant foreign acquisitions of financial institutions to be approved by the Minister of Finance. Since 2004, there have only been four instances when this provision would have been applied. While this role would rarely be used, there is no doubt that this kind of oversight should be brought back.

Michael King, finance professor at the Richard Ivey School of Business, says:

This kind of a rule is actually one of the reasons why Canadian banks weathered the crisis so well over the years. ... Canadian banks have done well. And it’s helped the Canadian economy to have such stable banks.

Alec Bruce, noted Times-Transcript columnist, has reported that the finance minister has a point. “When our banks top up their foreign holdings in this environment they do, in fact...”, in essence, import many of the efforts they've made overseas and reject all of the contagion that comes overseas as well.

This also builds on recent stabilizing measures we have introduced to secure the financial sector. Budget 2011, for example, announced the government's intention to establish a legislative framework for covered bonds, which are debt instruments secured by high-quality assets such as residential mortgages. This will make it easier for Canadian financial institutions to access this low-cost source of funding and help create a robust market for covered bonds in Canada.

Consumer protection is another area where we have taken decisive action to strengthen Canada's financial sector. In 2009, for example, our Canadian government acted to protect Canadian credit card users. The measures we introduced mandated that the inclusion of clear and simple information on credit card application forms and contracts would be required, and also required clear and timely advance notice of changes in rates and fees from card providers.

We have also limited credit business practices that do not benefit consumers. For example, we require credit card insurers to provide consumers with a minimum 21-day interest-free grace period on all new purchases when consumers pay their balance in full by the due date. We also require a minimum 21-day grace period on the billing period as well if the consumer has an outstanding balance that needs to be carried forward.

We have moved key information such as interest rates, grace periods and fees out of the fine print buried in credit card applications and contracts into a prominent summary box, so that consumers signing an application know exactly what kind of financial arrangement they are agreeing to. This measure also provides a clear picture of their debt load as they pay it off.

These initiatives are in effect today and are providing Canadian consumers with precisely the kind of financial information that leads to better decision making. These measures, like those in Bill S-5, reflect the understanding that every part of Canada's financial system must be resilient and strong for the benefit of individual consumers, businesses looking to raise capital, or the banks and other financial institutions that can help them realize their goals.

That is why Bill S-5 is focused on those areas that must be fine-tuned so Canadians can continue to rely on one of the world's best financial systems for years to come.

I would therefore encourage the hon. members of this House to support the timely passage of this bill and to join our government in its ongoing efforts to build and maintain Canada's financial sector advantage.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Mr. Speaker, what does the member opposite think about the fact that very few people expressed their opinions online during the consultations?

[Rod Bruinooge, Conservative, Winnipeg South, MB]

Mr. Speaker, when this bill was first introduced in its previous form in 2010, there was an extensive consultation period that was launched.

Of course the Internet is one way in which people can provide feedback to the government, but there are many other forums, as the hon. member is aware. There are other processes through which we as government receive information.

I think the process has been productive. Obviously we have a good bill today before the House.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Speaker, I want to thank the hon. member for his speech today, which outlined several very important technical parts of Bill S-5.

The hon. member spoke about the bridge bank protection, which is provided by CDIC to financial institutions in trouble. He also spoke about the plank that allows ministers to approve any foreign company that wants to come in and take over a domestic financial institution.

I would like to ask the hon. member to comment specifically about something he spoke about in regard to consumer protection and the clearness, openness and transparency that is going to be required of credit card companies. I think that is a very important part of the bill, which protects consumers across Canada.

[Rod Bruinooge, Conservative, Winnipeg South, MB]

Mr. Speaker, I think that builds on a transparency in advertising philosophy, which is something consumers have come to expect in recent years.

I am very happy it is something that is also going to be applied to credit card distributors, people who provide credit. Though it is obviously a financial service that is needed and they are companies that should be able to profit from their services, at the same time they need to provide information that is transparent and provides consumers with the information they need to be able to make proper decisions.

[Tyrone Benskin, NDP, Jeanne-Le Ber, QC]

Mr. Speaker, it is one thing to be able to see the information, and I appreciate that aspect. It is one thing as consumers to know how much we are getting dinged. I wonder if there are any aspects of the bill that look to curtailing some of the seemingly gouging practices of banks, as concerns fees and interest rates?

[Rod Bruinooge, Conservative, Winnipeg South, MB]

Mr. Speaker, I think obviously it is important that people are able to have a fair interest rate. Ironically, we may be living in the lowest interest rate moment in world history. I know recently, in Canada, five-year mortgages have dropped to historic lows of 2.99%, although perhaps I will move to another realm, which I think the member was probably asking about, in relation to credit card fees.

As I said earlier in a previous answer, I believe these companies that are engaging in offering credit sometimes to people who do not have excellent credit ratings should be able to earn a living off of that. It is up the consumer, I think, provided the information is provided, to choose whether or not to take part in that type of credit facility.

[Susan Truppe, Conservative, Parliamentary Secretary for Status of Women]

Mr. Speaker, I would like to thank my hon. colleague for his detailed and passionate remarks.

I would like to ask the hon. member if he would tell the House what the process was for the consultation.

[Rod Bruinooge, Conservative, Winnipeg South, MB]

Mr. Speaker, I do want to thank the parliamentary secretary for doing incredible work since she has been elected to this House. She has been a real pleasure to work with and I am honoured to be her colleague.

As I said earlier, there has been an extensive process of consultation, but there is always ongoing consultation when we are involved in processes that engage the public to the wide degree that this bill has. It is really an ongoing consultative process, and with a sunset clause in five years, of course, we will be continuing to consult.

[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.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, I thank my colleague for all his knowledge and the test for members of Parliament. We will wait for that test.

My colleague talked about a lot of the things in the legislation. I have noticed what is actually missing from the bill. There are a lot of things the government could have put in the bill, but it chose not to.

One of the things the New Democrats have been talking about for the last couple of months is the lack of support for the Ombudsman for Banking Services and Investments, OBSI. This was something that happened before 2006. The government had a choice to bring forward legislation to ensure consumers and small businesses would be protected if they had a complaint against one of the large institutions. That is the job of OBSI.

On the front page of the Globe and Mail today, OBSI is now worried and the board is considering closing because of the government's inaction.

Would it be fair to say that it is time the government starts to look at what is missing and to listen to what other organizations are saying about putting stuff in that will help small businesses and consumers?

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

Mr. Speaker, my colleague is absolutely correct. I have always been interesting in participating, especially for youth in my riding, in financial literacy. He points out some of the factors, like having an ombudsman, which is ideal in this case. There are so many instruments out there and so many ways to invest from our basement, or our living room or in front of our laptop that it now becomes overly cumbersome to know all the rules and regulations about this.

The debate to bring some of the elements of consumer protection into this are absolutely necessary. I do not know if this is where we go with this. Bill S-5 is to update the financial regulations in our country so they are in tune with other things.

I would agree with the member that we should have a larger debate on this. In my opinion, it should be focused on the protection of the consumer in light of the increasingly larger institutions out there.

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

Mr. Speaker, I appreciate the speech by my hon. colleague from Bonavista—Gander—Grand Falls—Windsor. Terra Nova should be the name of his riding, but we will talk about that another time.

I am speaking of things that are not in the act, and I hope this will not be a troubling question. The financial transaction tax was mentioned earlier today in debate by a Conservative member as something the Conservative Party opposed. The Green Party supports it.

Does the hon. member have any thoughts about bringing in an international levy at a very tiny level that would create funds that could be used if we were to have another collapse of the highly speculative derivative market globally, which in my view is still not adequately regulated?

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

Mr. Speaker, that opens up a fascinating discussion if we are talking about an international levy, and I am assuming in minuscule amounts. As a cushion or protection, I do not think the government would be adverse to talking about that. It did bring in the security fee for people travelling in airports, which I would call a travellers tax. Nonetheless, the Conservatives certainly see the importance of bringing in some of these fees or particular levies for the sake of protection of the consumer, in that case the protection of the traveller.

I do not have much knowledge on the levy itself she is talking about, but I would consider it if in the end it provided protection, not just for a particular consumer but also for employees in case of bankruptcy or environmental hazards.

I would like to see some kind of international levy for businesses regarding environmental hazardous waste. When companies wind down and leave, who cleans up after them? There is no money available for that, unless it is on a military base or something of that sort, but what about industrial bases? I may be getting off topic, and I think I am, but nonetheless I should probably stop there.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, I am pleased to speak to Bill S-5.

Today we have discussed many of the important features of Bill S-5, which will strengthen Canada's financial sector advantage. As many speakers before me have noted, this is a mandatory, routine bill. Moreover, it includes many technical or administrative amendments that can be somewhat classified as housekeeping. However, there are a few more substantive measures that address current, global and domestic trends that I would like to highlight today.

The financial crisis highlighted the importance of evaluating the overall size of financial institutions, their global linkages and the impact these factors had on financial stability and the best interests of Canada's financial system.

In response to lessons learned, today's legislation proposes to reinstate an existing ministerial approval for select foreign acquisitions of financial institutions.

While Canada's sound financial system is a model for countries around the world, and we want to ensure that it remains secure, the global banking crisis nevertheless highlighted additional risk factors that supported more oversight of large foreign acquisitions.

To provide historical background, prior to 1992, banks were prohibited from owning a foreign subsidiary. In 1992 the government of the day amended the legislation to allow federally-regulated financial institutions to own a foreign subsidiary or hold a substantial investment in a foreign institution with the approval of the minister.

In 2001 that requirement for ministerial approval and review by the Department of Finance was repealed and oversight was limited to the Office of the Superintendent of Financial Institutions.

However, since 2001, the global banking crisis has highlighted additional risk factors that support the need for greater oversight to keep our financial system secure. As such, we are reinstating in today's bill some of those historical oversight provisions that were repealed in early 2001.

This bill would simply add ministerial approval if a federally-regulated financial institution acquired a major foreign entity which increased its assets by more than 10%. The criteria that the minister could consider are hard-wired in the legislation, those being the stability and best interests of the financial sector. The timeline for approval is also hard-wired. The legislation would require the minister's consideration in 30 days or it would be deemed approved. This would likely only apply rarely. In fact, since 2004, there have only been a small number of cases where this proposed legislation would have applied.

The reactions from academics, bankers and the Superintendent of Financial Institutions have been quite supportive of the provision. I would like to share some of their reactions with the House.

Michael King, finance professor of the Ivy School of Business stated:

This kind of a rule is actually one of the reasons why Canadian banks weathered the crisis so well over the years...Canadian banks have done well. And it’s helped the Canadian economy to have such stable banks.

Terry Campbell, president of the Canadian Bankers Association stated:

That power was given to OSFI, and now it is back with the Finance Minister to, in our view, give him a full suite of tools as part of his oversight of the financial system in Canada.

Julie Dickson, the Superintendent of Financial Institutions, stated:

—we fully support that decision. It makes sense for the Minister of Finance to ultimately have the ability to approve. It’s just going back to the way it used to be.

Today's bill would help ensure that Canadians would continue to have a strong and secure financial system on which they could rely. Canadians are proud that, unlike Europe or the U.S., we did not have to nationalize or bailout banks with taxpayer money. Canada has shown the value of ensuring a well-regulated financial system. That is something that has been recognized around the world.

Canada was ranked as having the soundest banks in the world by the World Economic Forum.

The influential magazine The Economist has also 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.

Canadians use financial services every day, be it by using their credit card, cashing a cheque, going to the bank, or signing a mortgage. I think members would agree that Canadians deserve to be treated fairly when using these products and to be provided with clear information before agreeing to use them.

Indeed, since being elected in 2006, our government has taken important steps to address consumer concerns and make financial services products more consumer friendly. Those measures have included: protecting consumers with new credit card rules, such as requiring consent for credit limit increases, a minimum 21-day grace period on new purchases, full disclosure for consumers, and limiting other anti-consumer business practices; bringing in a code of conduct for the credit and debit card industry to help small businesses dealing with unfair practices, as the code would help ensure fairness, encourage real choice and competition, and protect businesses from rising costs; and banning negative option billing for financial products. There is much more.

Our government agrees that making financial services products more consumer friendly is an important goal.

In this legislation, we are making a few important changes to federal financial institution statutes, including confirming that Canadians, including bank customers, are able to cash government cheques in amounts of less than $1,500 free of charge at any bank in Canada, and improving consumer protection by increasing the maximum administrative penalty that the Financial Consumer Agency of Canada, FCAC, could levy from $200,000 to $500,000. This would also bring FCAC penalties in line with other financial regulatory authorities, like the Office of the Superintendent of Financial Institutions and the Financial Transactions and Reports Analysis Centre of Canada.

This is in addition to consumer-friendly measures we announced in budget 2011, such as banning unsolicited credit card cheques, moving to protect consumers of prepaid cards, beginning to implement the task force on financial literacy's recommendations, starting with the creation of a financial literacy leader in the government. In fact, it was only last month that we introduced the financial literacy leader act to move forward on the financial literacy front.

I could go on to outline other very important components of the bill, but I will close by encouraging all members of the House to support this very important mandatory and routine legislation so as to ensure it is passed without delay so that we can continue to enjoy a strong, stable financial sector.

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

Mr. Speaker, as my NDP colleague from Sudbury mentioned a little earlier, the NDP is more concerned about what is not in the bill than about what is actually there.

I am going to start by saying that when it comes to consumer protection, Canadians continue, in general, to get ripped off by the banks with their high service and user fees and their outrageous interest rates on loans and credit cards, despite record profits. Last year, the banks profited to the tune of $25.5 billion, while Canadians' salaries are in decline.

I want to ask the hon. member the following question. In this bill, why does the government not concentrate more on protecting consumers rather than supporting the position of the big Canadian banks?

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, what we do know is that we have a very sound financial system and that it is a model for countries around the world. In fact, for the fourth year in a row, Canada was recently ranked as having the soundest banks in the world by the World Economic Forum.

I believe that ensuring we have a sound banking system ultimately benefits consumers.

I would like to talk about what acts are included in this bill.

The four principal acts that govern the financial sector, the Bank Act, the Insurance Companies Act, the Trust and Loan Companies Act, and the Cooperative Credit Associations Act, all have their sunset dates renewed for five years.

There are also changes to related statutes, such as the Financial Consumer Agency of Canada Act, the Office of the Superintendent of Financial Institutions Act, the Bank of Canada Act, the Canada Deposit Insurance Corporation Act, and the Canadian Payments Act.

There has been a fairly broad inclusion with some of these organizations in this legislation.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Speaker, I congratulate the member on her speech in which she talked about several very important planks that are contained in Bill S-5.

I would like her to expand on some of the consumer protections. We have done some work on expanding the transparency for consumers when they apply for and receive their credit cards, and several other measures to protect consumers. I wonder if she could expand on those aspects.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, I appreciate the work my colleague does on the government operations and estimates committee.

As I said in my opening remarks, since being elected in 2006, our government has taken many important steps to address consumer concerns and make financial services products more consumer friendly. I mentioned that we have introduced new credit rules, such as requiring consent for credit limit increases, a minimum 21-day grace period on new purchases, full disclosure for consumers, and limiting other anti-consumer business practices.

We have also brought in the code of conduct for the credit and debit card industry. This helps small businesses deal with unfair practices.

The bill addresses the concerns of consumers. It also ensures that we have a strong financial sector.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Mr. Speaker, I listened closely to my colleague's remarks, and I must admit that I am very concerned, as are all my colleagues here, about foreign acquisitions by our financial institutions.

These acquisitions are currently subject to the approval of the Office of the Superintendent of Financial Institutions, but under this bill, they would instead be subject to ministerial approval. Let us be clear. When we look at the work done by ministers in this cabinet, there are no two ways about it: there are a lot of double standards.

How can my colleague justify taking this responsibility away from a neutral stakeholder and handing it over to another stakeholder who may not be impartial?

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, when it comes to the approval of foreign acquisitions being returned to the minister, we know our financial system is a model for countries around the world. It is something that happened in the past. Many of the quotes that I gave during my speech support this move. This simply requires ministerial approval when a federally regulated financial institution acquires a major foreign entity that significantly increases its assets by more than 10%.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, it is an honour to once again rise and speak to this bill.

It was just over one month ago that I stood in this House to speak to this bill. In my speech, I warned the government that the biggest failure of this bill was in fact what was omitted, specifically a provision to ensure that banks were mandated to participate in the Ombudsman for Banking Services and Investments dispute resolution mechanism.

There has been a lot of talk on this side about the consumer protection plan. Avoiding and ignoring this piece completely leaves consumers in the cold. The Conservatives talk about the voluntary code, but they have done nothing to address the online or e-commerce need for the voluntary code. They talk about what they have been doing on credit card interest rates. However, making the font bigger on a bill does nothing to help the consumers. What it does is it lets them know how long it is going to take to pay it off. The Conservatives are doing nothing to actually support consumers with this. It is mind-boggling how they can say one thing and do another.

Two weeks ago today, I participated in a finance committee hearing on this bill. Witnesses from Option consommateurs and the Canadian Community Reinvestment Coalition echoed the testimony of Doug Melville, ombudsman and chief executive officer of OBSI, that the economic regulatory system that Canadians rely on has been negatively affected by the government turning a blind eye to banks leaving the OBSI system.

In his opening statement, Jean-François Vinet from Option consommateurs said:

Option consommateurs is highly preoccupied with what Mr. Douglas Melville mentioned earlier—that the banks not only choose but pay for the dispute resolution business that tries to resolve the complaints that consumers send against them. The lack of independence of such a structure, and the conflict of interest between banks and the business hired to resolve disputes against them by consumers, doesn't guarantee consumer protection in Canada and access to a neutral party.

He went on to say:

We're asking the government that all financial institutions that are federally regulated be obligated to offer OBSI for complaint resolution by consumers.

That's our key message. We hope government will understand this, and that it is common sense.

Unfortunately, sometimes there does not seem to be common sense coming from that side of the House.

Tyler Sommers from Canadian Community Reinvestment Coalition recommended that the government “ensure that all federally regulated banks are required to use the Ombudsman for Banking Services and Investments to ensure consistency and independence in the resolution of customer complaints”.

What was the government's response in what was meant to be a systematic review of legislation governing the banking system? The Parliamentary Secretary to the Minister of Finance complained that the witnesses were addressing issues that had been missed by the legislative review. Apparently the government did not want to hear how to further improve the banking system. It only wanted to hear witnesses tell the committee what a wonderful job it had done.

The problem is that is not true. Unfortunately, due to the government's decision to make the system review a technical bill with a very narrow scope, the government stopped parliamentarians from bringing forward the amendments required to make this bill the type of banking review that will help consumers, help small businesses and help the economy as a whole.

Today, business sections in some of Canada's top media outlets are reporting that OBSI's board of directors has approved a scenario for winding down operations if the government continues to allow banks to opt out of the OBSI system. The board is worried that its credibility as an independent ombudsman is being undermined by banks leaving the OBSI system if they disagree with OBSI decisions. The closure of OBSI's banking arm would be dreadful for consumers and for small businesses in this country.

The problem with allowing banks to choose their own firms to manage dispute resolution is that the banks become the firm's customers. As the old adage goes, for any business to thrive, the customer is always right. How can consumers trust any decision made by a private firm when they know that the bank is the one writing the paycheques?

As Mr. Melville very eloquently put it when he appeared before the committee:

A service hired by the bank and that consequently has the bank as a client creates the perception, if not the reality, of a loss of that critical independence on which we function. The service will know whom it is they need to please in order to keep the business, and it's not the individual making the complaint. It's a clear conflict of interest.

The problem with the government not addressing the issue of the banks leaving OBSI is that this is entirely a problem of its own making. In budget 2010, the government announced that the banks would be required to be a member of an approved third party dispute resolution mechanism, but it did not explicitly state that it must be OBSI. As such, both RBC and TD took this as a carte blanche to pull out of the OBSI system and move to a private dispute resolution system. Without the appropriate regulations or legislation being brought forward by the government, both the banks and OBSI have been in regulatory limbo for the last two years.

The government has had many suitable opportunities to bring forward the required changes, most notably during the financial review that we are currently debating. Now is the time for the government to own up to its mistake and make the OBSI participation mandatory.

Customers at TD and RBC are already paying the price. These customers are being turned away from the new private dispute resolution provider. They are being told their complaint is not within the firm's mandate. They are being discouraged from making their complaint or their complaints are simply not properly followed up.

If OBSI is to shut its doors to banking complaints, all bank customers in Canada will be subject to this level of misinformation and diversionary tactics in order to ensure the happiness of the private dispute resolution provider's customers. Guess who they are? They are the banks.

The irony, of course, is this. Where do Canadians who have complaints with TD and RBC turn to for help with bringing their concerns forward? It is to OBSI.

Unfortunately, I will be supporting this bill, as it needs to be passed by April 20 in order to ensure compliance with the Bank Act and to ensure we do not add increasing insecurity to the economic and financial markets within Canada. However, it is with a heavy heart that I will be supporting this bill, not because of what is in it but because of what could have been. This bill is truly a missed opportunity.

In closing I would like to repeat the words of Mr. Melville in his opening statement before the finance committee:

Should banks be permitted to choose their own provider of dispute resolution, in essence to hire and pay for the organization that will judge and rule on their market conduct? I ask you this. If the banks were given the choice of being regulated by the Department of Finance, or some private for-profit body of their own choosing, whom do you think they would choose?

It is very obvious.

The government has a role in ensuring the stability of the financial systems. The only way to ensure the stability of the banking sector is by increasing consumer and small business confidence, which was shaken by the financial crisis. If consumers and small businesses do not believe they have access to an impartial ombudsman if they have a complaint with their bank, there will be no way to guarantee their confidence. The government needs to act now to ensure this is not the case.

With that, I look forward to answering questions.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I would like to thank my colleague from Sudbury for his speech, his passion for defending the rights and the protection of consumers, and the admirable way he represents his constituents in Sudbury.

I would like to ask him how consumers will be protected, given that there is no independent organization that deals with complaints against the banks, such as the ombudsman’s office, which he referred to.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, I would like to thank my hon. colleague for all of her great work on the industry committee and many other places. We recently discussed e-commerce, mobile payments and how the voluntary code is not reaching into those areas yet.

OBSI was created approximately 15 years ago at the request of the government of the day, because the industry at that time was not protecting consumers and small businesses. Consumers and small businesses had nowhere to go when they had a complaint. The government of the day created this great organization and it is in place. Now because the government has chosen not to act, not to put the legislation in place to keep it around, it is going to disappear.

This is not about someone who has lost $50 in a bank account, this is about when a mistake was made on a mortgage. This was created when a mistake was made on retirement savings, and what we can see happen on the far end of the spectrum is people losing their homes and losing their retirement savings because the government is choosing not to act.

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

Mr. Speaker, he talks about OBSI, but what about the role of FCAC as well? Would that not be beneficial for many of the multiple providers to the system?

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, of course, FCAC provides a very positive role to consumers and the banking institutions. However, we are talking specifically about protecting small businesses and consumers and giving them an avenue to ensure they are not being taken by the banks. It provides those necessary rules and regulations. FCAC is looking at competition and making sure there is fair competition in the market. However, a mistake being made by the bank has nothing to do with the competition aspect. OBSI offers resolution when a bank makes a mistake.

The average small business or consumer does not have the deep pockets to take on TD or RBC, or any one of the large financial institutions. Therefore, the consumers need an organization that has those deep pockets, to challenge these guys in court, if need be, and to make sure there is some fair resolution. That is what OBSI does. That is why the government is dropping the ball in protecting consumers.

[Mathieu Ravignat, NDP, Pontiac, QC]

Mr. Speaker, I congratulate my hon. colleague on all the work he has done to protect consumers. As a New Democrat, I have an issue when concentration of power is too high. Financial institutions, according to the bill, would now be subject to ministerial approval, rather than approval of the superintendent of financial institutions. I wonder if these decisions risk being partisan, instead of being without political interference?

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, I would like to thank my hon. colleague from Pontiac for his involvement on this file. We have talked about things that we can do to help his constituents and other issues related to consumer protection.

I have been talking about OBSI quite a bit because of the serious ramifications that could result from the government's inaction on this file. To start to see control being taken away from non-partisan, independent organizations right across the country is truly worrisome. At the end of the day we want to ensure that there is fair, independent resolution for consumers and small businesses. I do not know if we will see that when we start involving partisan decisions. Therefore, we need to ensure we are bringing forward organizations like OBSI.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, as the member of Parliament for the riding of Renfrew—Nipissing—Pembroke and the beautiful upper Ottawa valley, it is my pleasure to have this opportunity to highlight some of the very important measures in the legislation before us today, Bill S-5, the financial system review act.

We are fortunate in Canada to live in a country with a stable democracy governed by a political party and a Prime Minister who have created a climate in which Canadian businesses can thrive, generating profits and jobs. We respect average Canadians who pay their taxes, work hard and play by the rules, something they expect leaders in public office to do. We are not afraid to stand up against big business or big labour when they break the rules or the laws. We take the time to communicate regularly and honestly with the people of Canada. We have a realistic and uplifting vision of the future of this country, one that respects those who present opposing positions, while at the same time ensuring that individual human beings are treated with dignity.

It is important to keep what we have, that which makes Canada the best place to live in the world today. That includes the public institutions which govern our society. We are fortunate in Canada to have a strong and safe banking system, a system that has been declared the safest banking system in the world for the past four years in a row by the World Economic Forum. The international Forbes magazine has ranked Canada number one in its annual review of best countries with which to do business. Five Canadian financial institutions were named in Bloomberg's most recent list of the world's strongest banks, more than any other country.

The measures in today's legislation would further ensure that our financial system remains a Canadian competitive advantage and that consumers receive the highest possible standard of service. Bill S-5 includes measures that would: improve efficiency by reducing the administrative burden on financial institutions and adding regulatory flexibility; expand the consumer protection framework, including enhancing the supervisory powers of the Financial Consumer Agency of Canada, or FCAC; and update financial institutions' legislation to promote financial stability and ensure Canada's financial institutions continue to operate in a competitive, efficient and stable environment.

The act would facilitate: clarifying that Canadians are able to cash government cheques under $1,500 free of charge at any bank in Canada; improving the ability of regulators to share information efficiently with international counterparts; reducing the administrative burden for federally regulated insurance companies offering adjustable policies in foreign jurisdictions by removing duplicative disclosure requirements; and promoting competition and innovation by enabling co-operative credit associations to provide technology services to a broader market.

As the member of Parliament for Renfrew—Nipissing—Pembroke, a geographically large rural riding in eastern Ontario, one of the issues I deal with on a regular basis is the lack of service in rural areas. Several years ago I found it necessary to contact FCAC regarding the closure of a rural bank. The branch was in the community of Whitney, South Algonquin township, which is east of Algonquin Park.

The closing of the only financial branch in the area represented extreme hardship, particularly for residents without vehicles. Those with vehicles faced a 70 kilometre trip in all kinds of weather to Bancroft, where their accounts were to be transferred. Access to basic financial services is something that most Canadians take for granted. By working together in the community, we were able to come up with an acceptable alternative. A credit union set up a satellite branch in a local grocery store, a location that has better hours and a more accessible location than was previously the case. That arrangement is still working today.

I mention this as an example because the legislation before us today expands the supervisory powers of the Financial Consumer Agency of Canada. In my experience, I appreciated the ability to turn to the agency. I support that capacity and the continuing need to protect financial consumers in Canada.

The determination to continually strengthen our financial system has served this country well. It helps explain why our nation's economy has remained solid and sustainable under recent global stress. However, Canadian banks must also understand that they operate in a highly competitive environment and must be prepared to respond to the specific needs of Canadian consumers.

Our government is committed to ensuring that consumers are protected in their dealings with financial institutions. With the growing array of financial services offered to and used by consumers, making sure that Canadians have the tools and knowledge necessary to be confident in their financial decisions is a priority that we take seriously.

Earlier this month, for example, the Minister of State (Finance) announced that the government is moving forward with several measures to protect Canadian consumers and help them achieve greater control over their own finances. These measures, part of budget 2011, include a proposed ban on unsolicited credit card cheques and a new shorter cheque hold period, taking effect on August 1, 2012 and giving Canadians more timely access to their own money.

The fact is that credit card cheques are considered to be cash advances, which generally incur higher interest rates and fees and do not offer an interest-free grace period. The proposed legislation, the regulations banning the distribution of unsolicited credit card cheques, would amend the credit business practices regulation to require federal financial institutions to receive the express consent of borrowers before distributing credit card cheques. This would help to ensure that Canadians understand fully the terms and conditions of using these credit instruments and the obligations and implications entailed from both a payments and household budget perspective.

At the same time, a new code of conduct on mortgage prepayment information was also announced. The Financial Consumer Agency of Canada, or FCAC, has come out in support of these proposed changes, saying it welcomes the changes the government is proposing to the FCAC act. The changes are technical amendments or clarifications to existing provisions. FCAC would monitor adherence to the code and participating institutions would provide a link on their website to the agency. Lenders would make available a toll-free number so that borrowers could speak to staff members who are knowledgeable about mortgage pre-payments.

This improved disclosure would give Canadians important new details to help them make well informed financial decisions. Mortgage lenders would provide details on any obligations or penalties home buyers might incur when paying down their mortgages. That would include prepayment privileges, an explanation of the charges, a description of factors that could alter charges over time and customized information about the borrower's own mortgage. Most importantly, the code requires this information when consumers are making key decisions, such as at renewal and in annual statements. After all, if people do not understand the information provided to them by financial institutions, we can never accomplish our goal of empowering financial consumers. These regulations would not sit and gather dust on a shelf; instead, they would be overseen by the FCAC

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Mr. Speaker, I heard the member opposite mention that Canada's banking system had proven that it was quite safe during the financial turmoil that, in recent years, affected the whole world.

In her opinion, do the consultations and the provisions in this bill really favour consumers? Do they not instead favour the big lobby of financial institutions?

Unfortunately, we saw that in the United States, the financial institutions asked for a great deal of freedom with respect to their activities, which led to the 2008 debacle, among other things. I would like the member's opinion on this.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, in the reviews that were done and at the stakeholder meetings, information and recommendations were taken from consumers. Consumers held the highest priority.

I want to speak a bit more about the FCAC. In doing so, the FCAC will continue to do its part to help inform financial consumers in Canada by developing plain-language educational material on a wide range of financial products and services. This is something that was requested during the consultations with consumers.

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

Mr. Speaker, my NDP colleague touched on that a few minutes ago. We know that stock market speculation is largely responsible for the economic turmoil we have been experiencing in Canada since 2008. That is why I was disappointed that the Conservative government did not introduce more banking regulations in this bill.

The Conservative government is refusing even to consider regulatory policies that would restrict unproductive speculation on the financial markets and stock exchanges that does not create jobs but increases financial sector volatility.

We know that many retirees have seen their savings evaporate because of financial speculation.

Why did the Conservative government not include more regulations covering stock market speculation in this bill to regulate financial institutions?

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, we are continuing to work on the aspects of securing the speculative market.

Furthermore, at the request of consumers, the FCAC has also developed innovative approaches such as a mortgage calculator that quickly determines mortgage payments and the potential savings resulting from prepayments. It has also introduced online tools that help consumers shop for the most suitable credit card and banking package for their needs.

The FCAC also created two tip sheets to help Canadian consumers looking for more ways to save money. One is on choosing the right banking accounts and another is on keeping the service fees low.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I thank my colleague for her speech and her work as a member of the Standing Committee on Industry, Science and Technology. Committee members work well together. I know that she is focused on protecting consumers and ensuring that they get the straight goods.

Does the government member believe that this bill really addresses consumers' concerns, particularly in terms of transparency with respect to the bank fees they have to pay? Does she think that this bill goes far enough?

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, I thank my colleague for her kind comments about the industry committee. In one of our recent studies we heard a great deal of testimony on the subject of credit cards. Thanks to the new measures recently announced, the upsetting practice in question and others are coming to an end. That is in addition to other recent changes as well, such as requiring a customer's consent before raising credit card limits. The government has shown a commitment to improving banking regulations in Canadians' favour. I believe this is welcome news to my colleague opposite.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, we are at this point today because we have to be, since the legislation requires a review every five years. That last time the financial system was reviewed was in 2007, so it is very appropriate that the members of the House are looking at this issue now.

Like most of my colleagues, the NDP will support this bill at second reading, partly because we would like the Standing Committee on Finance to examine the bill in detail, and partly because we do not have much choice. Indeed, we have very little time, because the bill must pass in April.

That said, this does not mean that we do not have some serious concerns about this bill. One concern is the government's haste to pass this bill so quickly. We believe that the process has been rushed. There was less than a month's notice and consultation was very quick. About 30 submissions were received, most of which were not even signed. Thus, public consultation was very limited.

It is too bad, because this bill, although a necessary part of the review of the financial system, also affects the wallets of Quebeckers and Canadians. We truly regret the government's haste. This is a serious process that should have been taken seriously. As far as we can tell, that has not been the case.

Another one of our concerns is the fact that this bill comes from the Senate. Why? Consultations and consideration could just as easily have begun here in the House of Commons, with a much more in-depth process. We would have had more time, instead of ending up in a situation where the bill is coming from the Senate and was studied there. This House is practically being asked to ratify a decision that was made in the Senate.

There is a big difference between the other place and here. We are elected parliamentarians with a mandate from the people, the same people whose wallets are affected by the proposed changes in this bill. Nonetheless, we, the elected parliamentarians, simply have to comment on a more thorough study that was initiated in the Senate.

This bill is important and it is really sad to see that the process has been taken so lightly.

A third concern is the government's right to veto substantial foreign acquisitions. Some of my colleagues raised this matter. There are two conditions: first, the acquiring bank must have equity of $2 billion or more; second, 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, must exceed 10% of the value of the bank’s consolidated assets.

This process is officially a ministerial guarantee that Canada's banking and financial system will continue to be stable, even though some banks and institutions have a strong desire to expand their activities abroad. The rationale is that this requirement will prevent the purchase of an entity that does not have the same aversion to risk and that could jeopardize the stability of the system in the event of another crisis.

Some uncharitable souls might say that this government is trying to take credit for Canada's strong performance. What concerns me more is the provision whereby the government has 30 days to review a foreign acquisition and, if the time expires, the transaction is deemed to have been approved by the minister.

At the Standing Committee on Finance hearing on Bill S-5, my NDP colleagues tried to get answers about this provision, and the minister of state did not provide any reassurance. When asked by my colleague for Brossard—La Prairie, as well as the Liberal member for Kings—Hants, if the application would automatically be approved if the Office of the Superintendent of Financial Institutions indicated that the proposed transaction was not to Canada's benefit and the 30 days elapsed, the deputy minister replied that that was correct.

Therein lies the loophole. If the minister wants to take credit for Canada's sound financial position, he must also guarantee that significant transactions abroad will benefit our country.

As my time is limited, I will now turn to what is missing from the bill. It is unfortunate, because we would have had the time to study the bill if the consultation process and the review here in the House had not been rushed. We would have liked to have seen some important items, which are not in the bill.

When this bill was announced the Minister of State for Finance said:

The most important thing to us is making sure that we protect ordinary Canadians, that their savings are protected, that there's credit available to them, that we have strong and stable banks. When Canadians need to borrow money, we have to have strong institutions for them. It is overall oversight, the final oversight, that is in the right place in the hands of the finance minister.

The problem is that the government is engaging in doublespeak. On one hand, it is doing a very good thing by expanding and enhancing the powers of the Financial Consumer Agency of Canada. However, on the other hand, the government does not seem to understand the importance of proper regulation to ensure that financial institutions take their share of responsibility for debt and financial literacy.

Credit must be given where credit is due: this government is doing a good thing for consumers by extending the definition of consumer protection provisions. A wider range of organizations will thus be subject to these provisions, including banking representatives and intermediaries.

However, the government is completely missing the mark when it comes to the more specific provisions on consumer rights. How can the government advocate for greater financial literacy—a task force, a motion and a bill—and then turn around and say something like this about personal and household debt:

I'm not the first one to make this statement and I won't be the last: interest rates have only one way to go, and that's up. Canadians need to recognize that whatever debt you take on now, please plan on the cost of carrying that debt increasing at some point. It may stay low for a long time; we don't know that. But the downside is much less than the upside possibilities.

It is important to understand that banking and financial regulation must serve two purposes: the expansion and development of the system and public protection. That is why rules must be implemented by a neutral and impartial third party.

In my opinion, there is a very good example of this problem, and that is the fact that the big banks are not required to participate in the system of the Ombudsman for Banking Services and Investments, the OBSI.

Only last year, the Toronto Dominion and Royal banks pulled out of OBSI system and chose to go with their own ombudsman system. Terry Campbell, president of the Canadian Bankers Association, stated on behalf of the association that this was a change in provider.

While revising the legislation, could the government not have taken advantage of the opportunity to develop a better system and require large federally regulated financial institutions to be governed by that system?

That question is worth asking. Instead of doing that, the minister told the committee that there will soon be regulations governing internal and external dispute resolution mechanisms.

The OBSI's 2011 annual report was released last week and received significant media coverage because of those two pullouts.

The report said that the move by TD Bank and Royal Bank to opt out of the process and instead hire their own independent firms to handle customer complaints lacks credibility:

The dispute-resolution process that consumers access needs to be credible, independent, and impartial—not beholden to any one stakeholder group.... Allowing banks to choose a dispute resolution provider gives all the power to the financial institution and none to the consumer.

This bill fails to address some crucial issues. I think that consumer rights is one of those issues, and this bill would have provided a perfect way to resolve consumer rights issues and remedy the excesses that were in large part responsible for the crisis in 2007, 2008 and 2009.

But that is not in this bill because the process was not taken seriously and was bungled. The process began in the other place, but it should have started here. Parliamentarians have been given very little time for discussion because the deadline to pass this bill and renew the Bank Act provisions is April 20.

We will therefore be supporting this bill on second reading, simply because we have no choice. We are living in a time of economic uncertainty, but that does not relieve the government of its responsibilities. The government should have used this process, which comes around every five years, to do a thorough review of financial legislation in order to protect consumers but also to protect the future of the economy. Unfortunately, there are many things missing.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I would like to thank my colleague, whose riding’s name I find hard to pronounce, for his work on the Standing Committee on Industry. The committee studied electronic commerce and spent a lot of time looking at the question of payments.

I would like to know, generally speaking, what he thinks about this government’s approach to regulation. What does he think about this government’s slack attitude when it comes to tighter oversight of financial institutions and the danger this might present to consumer protection and the economy in general?

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I would like to thank my colleague from LaSalle—Émard and my colleague from Sudbury for their excellent speeches. He is the expert to whom I generally defer on the question of consumer rights. He is now an expert in the House on this subject.

The question is timely because today we have a tendency to think that all regulation is a burden, is excessive and throws an obstacle in the path of commerce or the economy. That may be the case for certain types of regulation, and in those cases a review is in fact worthwhile. Regular reviews are appropriate, but they still have to be useful.

How could we protect the rights of consumers without regulations? By relying on the goodwill of the market? The goal of the market is not, first and foremost, to protect consumers. Its function is to generate profits for corporations, which is not necessarily a bad objective in itself, since those profits can eventually be reinvested and create jobs.

But when we talk about regulations, there are some that are useful. If there had been more regulations governing the banks, particularly in the United States, we could have largely avoided the excesses and the economic crisis that hit North America in 2007, 2008 and 2009. In fact, one of the main causes of the crisis was the massive deregulation we witnessed in the 1990s. Proper regulation can be useful for the economy. It does not need to be a millstone. We have to have intelligent regulation.

[Mathieu Ravignat, NDP, Pontiac, QC]

Mr. Speaker, I would like to thank my colleague for his speech.

In my riding, people are very worried about the big banks overcharging them. I am also shocked by this. It is unbelievable how much of our money flies out the window because of the banks.

I would like to ask my hon. colleague what this bill could have done to genuinely protect consumers from the big banks.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I thank my hon. colleague from Pontiac for his question.

The fact that we are discussing this bill so quickly, without additional information, means that we will miss many things.

For instance, when it comes to overcharging, the association and its member banks have a voluntary code. The voluntary code can be useful in many cases, but it is still a voluntary code. Accordingly, businesses, particularly banks and financial institutions that do not comply, will not be punished by laws or regulations, but rather through internal discipline.

I have no problem with leaving a voluntary code in place if it is working, but the legislation needs provisions to ensure that if the voluntary code is not enough to prevent certain excesses—in this case, it might be financial institutions and in other cases, it could be other businesses—we will be able to ensure that the government can and does intervene, once again, in the interest of protecting consumers and not for the sake of gratuitously interfering in the economy. There are specific times when the government has not only the right but also the duty to enforce regulations in the interest of all Canadians. This could be one such time.

Would I support specific regulations? Perhaps not exactly that. I hope that the committee will have the opportunity to address this matter, which is not in the bill but deserves to be considered.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I am pleased to rise in the House today to speak to Bill S-5. I have been listening to the debate this afternoon and the comments of my colleagues. Although the NDP has been supporting the bill, we find that it has a very limited form and it misses a big opportunity to address a whole array of consumer issues and consumer protection for Canadians, which is unfortunate. However, that, unfortunately, is what we have come to know of the government.

It is rather surprising to know that the bill originated in the Senate. We would be interested to know why it started in the other place that is unelected. As members of the House of Commons are directly elected, it seems to us that it would only be legitimate that a bill would begin in the House of Commons, go to committee and follow the usual process. It is very concerning that the bill began in the Senate. We would have thought the government would have given respect to the House of Commons and given the bill first reading and second reading here.

The bill is being portrayed as a very technical bill and would change the Bank Act and 12 other acts, which is all the more reason to go through it carefully because often the devil is in the details. When we look at amending a large number of acts, some significant changes can take place. I have noted that when the bill went to committee, the committee only had three sessions, which was a very limited time review and very few witnesses were called.

I would put this in the context of a larger pattern that is emerging with the government, which is that if bills are introduced here on the floor of the House of Commons they are rushed through. We have seen time allocations, gag orders and closure to limit debate. Now we are seeing bills being introduced and debated in the Senate as opposed to the House of Commons and then dealt with in a very perfunctory and rapid manner at committee.

I would say that is not a good sign, especially for a bill of this nature. It reminds me of a budget bill where, because of the enormous amount of technical details, it is easy for important details to be overlooked.

The NDP has paid an enormous amount of attention to consumer protection. Jack Layton, our former leader, pressed this, and our consumer affairs critic, the member for Sudbury, has done an enormous amount of work in bringing forward in the House of Commons the issue of consumer protection and how people are being gouged and ripped off by financial institutions.

For example, last year the bank profits were a whopping $25.5 billion, which is astounding. The financial sector industry is not only healthy but incredibly profitable while, at the same time, many people are getting laid off.

This afternoon my colleague from Nanaimo—Cowichan did a brilliant job of pointing out how fewer and fewer people now qualify for employment insurance. I think she said that only 39% qualify. While the need for EI goes up and the qualification period goes down, the length of the waiting time is also going up to about four months.

I wanted to say that because it is part of the growing income inequality that we are seeing in our country. We are seeing more and more people working in part-time jobs, minimum wage jobs or getting laid off. They cannot qualify for EI because of the government's incredibly onerous limitations and restrictions. On the other side of the coin, so to speak, we see major financial institutions making an exorbitant amount of money. It does create a society where there is a widening gap between wealth and poverty. There is a growing gap in income inequality.

When we put into that picture the corporate tax cuts that have been granted, the billions of dollars that we have lost in public revenue that could be providing for public services, when we look at the budget that we know is coming on Thursday and our fears about that budget and its impact on ordinary people and their ability to access needed government services, it is a picture that is very disturbing. We look at Bill S-5 in that context.

I am very proud that we in the NDP stand on a principle and priority of protecting people, of protecting consumers and people's jobs, in saying that we do have to have an economic plan, a jobs plan, a financial plan, and fair and progressive taxation. This bill, which presents itself as a technical bill and brings forward some changes that I think are useful, is a massive lost opportunity overall to provide much better protection for consumers.

I know that most consumers feel completely powerless when it comes to dealing with financial institutions. I speak to people who have made complaints. They come to my riding office and we write letters to the banks on their behalf. We often will write to the ombudsperson of a bank or the banking system overall and put forward a person's complaint that in the overall scope of things is not massive, but for that individual the fact that they feel they have been ripped off or gouged or not listened to by the banking institution is something that I think really plays into the feeling of cynicism they have about the people who run financial institutions and make very powerful decisions.

I am very proud that we in the NDP have always made it a priority to stand up for consumer rights and protections. We do know that Canadians get gouged by service charges, user fees and abusive credit card rates. Again, this is something that the hon. member for Sudbury has raised so many times in this House.

The idea that there are voluntary systems in place is almost laughable. We have seen that with the drug shortages that we have been debating in this House. We had an emergency debate on those shortages two weeks ago. It is the same thing. When we have a very serious systemic problem, whether it is drug shortages because the marketplace is controlling what is going on or now when we see people being gouged by financial institutions, the response by the government has been to let the parties get together and to see what they will do on a voluntary level. That is just not good enough. Therefore, as a piecemeal approach, I do feel that the bill falls far short of what we actually need to do with consumer protection in this country.

This worries me. Just from reading the background on the bill, it is very clear that there was very little consultation done. I think there were about 30 submissions and they were mostly from associations or from a technical point of view. We have to ask why there was very little consultation done on this bill. Is it because the government knew that if it actually did engage in an adequate public consultation, it would be opening up a Pandora's box and getting a whole mass of feelings and complaints and frustrations from Canadians in response? It is very unfortunate there was not proper consultation done for this bill.

In wrapping up I would say that we support this bill for the limited progress it makes, but it is very disappointing that yet again the government has missed the mark and failed to take into account adequate protections for consumers in this case.

People will still be out there, left out in the marketplace, feeling like they do not have a voice. I hope they know that they do have a voice in the NDP and that we will continue raising these issues in Parliament to ensure there is proper regulation and protection and that the rights of consumers will be upheld.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, I would like to thank the hon. member for Vancouver East for her great speech and all the great work she has been doing in the House.

I can recall a specific scenario a few months back in her riding, where a constituent of hers was very concerned about some mortgage insurance and how that mortgage insurance was being paid but was never actually paid for by the insurance company when needed.

We on this side of the House have been talking about what is not included in this bill. I can think of many people who have written to my office. A person named Craig wrote about how he had the same type of unfortunate circumstance relating to mortgage insurance and consumer protection.

The government completely drops the ball when it comes to this file. I can see the work the hon. member has done with her constituents and how this issue affects people from coast to coast to coast. I would like to hear the hon. member's comments on this subject.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, my hon. colleague is entirely correct that we actually both worked together on that case, which was a difficult case in one way but not in another.

It involved a constituent of mine whose parents had bought mortgage insurance. When one of the parents died, they thought they had mortgage insurance, only to find out that they did not because of the way the rules worked. It was a really huge shock to the family to find out after buying what they thought was protection or the ability pay off their mortgage with the insurance that it was in fact not worth the paper it was written on. It was worthless.

It is a very good example of how consumers can act in good faith and believe that they are operating the way they are meant to operate and are hopefully getting clear, honest and frank information from financial institutions, only to find out that, literally, the small print is so difficult to understand or the way it is being presented that they actually get ripped off.

That is a very good example of what the bill could have done. I know that we both wrote to the minister, raising this issue and urging that changes be made. It did involve provincial jurisdiction as well, but there was a federal role. It is a great example of the kind of thing that should have been done with this bill to protect consumers.

These are elderly people who put some money aside based on the belief they would be protected, only to find out that they got ripped off. When we hear these kinds of stories, and that is just one story, we realize that the system is not working properly. It is too bad that this bill is not focusing on the needs of those people and the fact that we could be helping them, if the bill were genuinely looking at consumer protection.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Mr. Speaker, I congratulate my colleague for her speech. She is very knowledgeable about this matter, as are my other colleagues.

I would like to ask her if she feels, as I do, that our friends opposite have once again listened carefully to the corporate lobby instead of taking care of the average citizen, just as they favour the all-American way with which they are fascinated.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I think that is an excellent point. I wholeheartedly agree with my colleague.

Again, this has become a too familiar pattern. It is a scary place out there. People try to navigate the marketplace. They try to play fair and to figure out what is a good deal and what is not, but unless there are proper regulations in place for consumer protection, people do end up getting ripped off.

When we have a government that is hell bent on basically listening to its friends and paving the way, sometimes through deregulation and sometimes legislation that actually helps these financial institutions, then we can see that it is just ordinary Canadians and consumers who get left behind. I think that is very worrying. Again, I think the pattern of that, with the income inequality involved and the people feeling they have fewer and fewer resources and information to actually deal with the marketplace and to have a sense of integrity about what is going on, is very concerning. It is something that we will keep pressing in this House.

[The Acting Speaker, Bruce Stanton]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker, Bruce Stanton]

The question is on Motion No. 1. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[An hon. member]

On division.

[The Acting Speaker, Bruce Stanton]

I declare Motion No. 1 defeated.

(Motion No. 1 negatived)

[Jim Flaherty, Conservative, Minister of Finance]

moved that the bill be concurred in.

[The Acting Speaker, Bruce Stanton]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[An hon. member]

On division.

[The Acting Speaker, Bruce Stanton]

I declare the motion carried.

(Motion agreed to)

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

Mr. Speaker, I ask that you see the clock at 5:45 p.m. so we can move on.

[The Acting Speaker, Bruce Stanton]

Is it agreed?

[Some hon. members]

Agreed.

[The Acting Speaker, Bruce Stanton]

The House will now proceed to the consideration of private members' business as listed on today's order paper.