Bill C-365

Consumer-led Banking Act

An Act respecting the implementation of a consumer-led banking system for Canadians

This enactment imposes certain obligations on the Minister of Finance in relation to the implementation of open banking in Canada.

Consumer-Led Banking Act

[Ryan Williams, Conservative, Bay of Quinte, ON]

moved that Bill C-365, an act respecting the implementation of a consumer-led banking system for Canadians, be read the second time and referred to a committee.

Madam Speaker, when I was a young boy, growing up, like many Canadians, I fondly remember playing the game Monopoly. I loved owning all the utilities, collecting Park Place and Boardwalk, then putting hotels on them and bankrupting all my brothers, sisters and family members. It was really great.

The game, of course, was developed in the early 1900s by Lizzie Magie. She wanted it to be an educational tool. It was meant to show the negative aspect of property held in the hands of a very few. One hundred years later, Canadians see that Canada has a monopoly problem. Canadians pay the highest cellphone bills on the whole planet. When it comes to groceries, we only have three Canadian grocery chains and two American chains that are driving prices up. When it comes to a lot of industries, like the Internet, we have a monopoly in the sky overhead. We have satellite, which is the only accessible Internet a lot of our six million rural Canadians can get from Elon Musk's Starlink.

Then we look at the main one, which is banking. We only have five Canadian banks that control 87% of all the mortgages. Excuse me, but it was five. Two weeks ago, the finance minister approved the merger of HSBC and RBC. The number one bank bought the number seven bank, which means that five banks now control 90% of all the mortgages in Canada.

Talking about how bad it is with monopolies, we can go back to 1776. Adam Smith talked about monopolies in The Wealth of Nations. He talked about the invisible hand and the many buyers and sellers who negotiate and dictate prices. If we remove that invisible hand, and if we take away sellers and keep it to a very few, then prices go up and wages go down. We are seeing that across Canada. Canada is the country that has the most monopolies per industry sector.

Oligopoly was a word created in 1930, and it means “few sellers”. It actually comes from the word “oligarch”. When we talk about an oligopoly, that is what we are talking about in the banking sector. When we have few sellers, prices go up, services go down, wages go down, start-ups go down and innovation goes down.

We only have a month to look back at what happened, with RBC announcing it was going to buy HSBC, and to see exactly what happened from that. Before the announcement, HSBC had interest rates of 6.4% versus RBC at 7.15%. After the announcement, those rates went up 6.55%. That meant if someone had a mortgage of $500,000 in Vancouver, they just paid $750 more a year. Monopolies benefit only the very few. The shareholders and the owners are the only ones who benefit, while Canadians lose. We certainly have that problem.

When it comes to the banking sector, we do have major problems because of this oligopoly. One-third of Canadians are upset with their financial institutions. Canadians pay some of the highest banking fees in the world. Because of economic conditions, J.D. Power stated that 50% of banking customers are “financially vulnerable or stressed”. That is an increase of 6% from only a year ago.

The banks will not share people's financial information. If people want the freedom to deal with another bank or institution, the banks feel that they own that information and will not share it with whom people want it shared. Canadians are nickel-and-dimed by the big banks for basic financial services, which Brits, Australians and Americans get for free.

The answer to our monopoly and oligopoly problem is right in front of us. A robust, open banking framework or consumer-led banking would allow the industry to overhaul its outdated systems and to modernize payment infrastructure, and would allow a platform for fintechs to fill the gaps left by Canada's oligopoly with one simple method. The banks would have to share one's financial data with one's consent.

Consumer-led banking makes the banks have to use an API, application program interface, so that companies could bank with people, and Canadians would get financial freedom. It is just common sense. It is freedom to decide who to bank with, which apps people want to use, how long their data is going to be used for and for what purposes.

It would mean that hundreds of financial institution applications and even new banks would be able to ply for Canadians' business, and Canadians would have the freedom of choice to decide who gets their banking business.

However, consumer-led banking, open banking, has already been delayed by this Liberal government for six years. My bill, Bill C-365, would end this six-year delay, and there is not a moment to lose. Other countries get it. South Korea implemented this in 2019, India in 2011, Australia in 2020, Japan in 2017, New Zealand in 2018 and the U.K. in 2018. Through consumer-led banking, we have seen countries other than Canada empower their consumers by allowing them, through security access, to share their own financial data. Other countries have reaped the rewards that Canada has lost out on.

In the U.K., with consumer-led banking implemented, with only 14% market share, consumers pay zero dollars for monthly transactional fees or for overdraft fees. Consumers in the U.K. pay zero dollars to their bank in general. The savings per year for the people in the U.K. is 12 billion pounds, and for small businesses, it is eight billion pounds. There have been over 250 companies created and over 4,000 jobs.

The reality, much like the industrial policy that Canada has lost out on, is that the most competitive and forward-looking leaders are based in other countries. Canada has some really great financial tech companies ready to lead the world, but if this is not implemented, they are going to leave Canada. This government has stalled, and the industry is losing patience, but let us walk through what has happened with this.

The government announced in 2018 that consumer-led and open banking would be in place by 2023. It is way past 2023.

The government hired an expert panel. Does that sound familiar? It hired an expert panel to weigh in back in the summer of 2021, which had a comprehensive recommendation of how to set up the system, including an 18-month implementation schedule.

The government hired a new expert to then come up with the framework in 2021. The expert reported back to the government in early 2023, but the report was never made public. In fact, it sits on the finance minister's desk. The minister sat on this report for six months and stalled this legislation, and now promises that it will be implemented. Strangely enough, after my private member's bill, Bill C-365, to get the government to implement consumer-led banking, it was tabled. However, this patient fintech industry is losing its patience, and we risk losing these companies, potentially worth hundreds of billions of dollars to this economy, at time when we need it the most.

For Canadians out there who are asking what “fintech” is, it stands for financial technology companies, and more Canadians have used a fintech app than they might even know. If a person cannot qualify for a loan because they do not have a Canadian credit history, they can share their monthly rent payments information with Borrowell's Rent Advantage to build their credit store. QuickBooks uses a person's transaction data to automate their bookkeeping, and there are one million small businesses using this app. Wealthica tracks a person's investment accounts at different banks while Wealthsimple is a Canadian online investment management service. Shakepay allows people to pay friends, buy Bitcoin and send money. KOHO is a no-fee spending and savings account with the perks of a credit card. Wise allows people to send cross-border currency quickly and efficiently.

The fintech industry in Canada is worth $9.4 billion with 169 investments in 2021 worth $1.75 billion, but it is despite this government, not because of it. Companies exist, but is almost in a black market.

Nine million Canadians have been simply giving away their online banking usernames and passwords, or what we call “screen scraping”, because the banks will not pass that information on. Screen scraping is illegal in most countries. Can members imagine having to share their safe word with another company because the banks just will not share their information? It is incredibly dangerous. As part of the U.K.'s open-banking reforms, the U.K. scrapped it, banned it and made it so that it could not happen. However, for nine million Canadians, it is happening each and every day.

Consumers need laws that force the banks to allow them to, on request, transfer their data from a bank to a financial tech organization, or to move it from bank to bank in order to give them financial freedom. It defines how the consent should be obtained, as well as the cybersecurity requirements that banks and apps must meet. Perhaps most importantly, open banking also helps customers hold their banks or fintechs liable if and when they are unreliable with their data.

Canada's reluctance to embrace open banking has recklessly allowed Canadians' private data to be at risk or compromised. Competition would help fix fraud. It makes companies sharper and makes them invest in better technologies. Currently, with fraud increasing, there has been a decrease in satisfaction with how banks handle fraud-related problem resolution. With competition, we would solve that.

The financial institutions that rank the highest in J.D. Power are those that effectively communicate about fees, fraud and savings; provide tools and information about budgeting and debt reduction; and address security and fraud problems in a timely manner. members can imagine that competition would also fix fraud. It is the lack of competition that is making Canadians have to put their data at risk, and this is compromising Canadians and Canadian businesses.

Let us be clear. Canadians want this. It is not just the cost savings, but the service. When we look at what Canadians want out of their banks, they want to be able to have the tools they want, when they want them. They want a bank that looks after their needs, and one that gets back to them. A lot of these fintechs are open during the weekends. We have seen other industries explode when they have competition. We see the service go up. We see wages go up. We make sure that we create good jobs that stay in Canada at a time when we need them.

Here are some comments we received when I put this bill forward. We have had a lot of good, positive feedback from fintechs that are desperately trying to get this legislation through. They have been asking for it for six years.

We have Sherri-Lee Mathers, an automation-obsessed accounting technologist, which are her words, in craft brewing technology. She writes, “Open Banking will bring improved Data-driven insights, and cashflow planning so desperately needed by Canadian Small Businesses. Especially, as they weather the challenges in the financial climate especially those industries that are still trying to recover from the pandemic!!...I SAY YES to OPEN BANKING!

Tanya Hilts is a CPB whose business name is Rev Up Your Business with Tanya: The Cloud-Savvy Bookkeeper & Efficiency Evangelist! These are great names. They are obviously entrepreneurs. Tanya writes, “Thank you...for your support....This is a game-changer for Canadian businesses, offering unparalleled transparency and control over financial data.”

Almost everyone I have met with supports this initiative and wants to make sure we get this right, get it through and get it going.

The other part right now is that start-ups in Canada are at a 20-year low. We have 100,000 fewer start-ups from entrepreneurs in Canada than we did 20 years ago, and this is at a time when we are seeing massive layoffs in the Canadian economy. We had announcements even in the last couple of weeks of thousands of jobs that are coming to an end and workers being laid off. We need this industry to grow. We need it to prosper. We certainly need it to excel with the right framework from the government, but we need that to happen right now.

The solution to Canada's monopoly problem is a Canadian consumer-led banking initiative and legislation that we want before the House within six months of this bill passing. In the United Kingdom, consumer-led banking has saved individuals 12 billion pounds per year and businesses over 6 billion pounds per year, with improved access to financial services, lower fees and greater control of their financial data.

Canadians know what a monopoly is, but they hardly know what a free market is. I talked about the board game Monopoly, and there is another board game called Anti-Monopoly, which is supposed to talk about the free-market system. It was supposed to teach our kids and families about a free market and what it is.

After 100 years of monopolies in Canada, it is time we open the free market. Today, Bill C-365 is calling for the government to reaffirm a promise to enact consumer-led banking and introduce legislation within six months so Canadians can have a free market in the banking sector and, with it, financial freedom and better prices, because Canadians and the Canadian fintech industry deserve more.

As the Conservative Party, we want to bring home savings and freedom to consumers. Let us bring home open banking to Canadians and the Canadian public.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, as I am sure the member is aware, in the fall economic statement, which is the debate that was going on, but Conservatives do not want to pass the legislation and are filibustering it, it talks about setting and establishing the framework for a lot of the things, and I would suggest possibly more, that he is talking about now. It talks about how the budget 2024 legislation will incorporate it.

I wonder if the member would make a commitment to not only support it, but also encourage his colleagues across the way to try to get it passed relatively quickly.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Madam Speaker, this is so simple, and I think I speak on behalf of all Canadians. I have five words: We do not believe them. They have had six years since they promised to implement this legislation. They said it would be done by 2023; it is 2024. All these companies have been promised one thing, but they did not get the answers.

A report for this exact open-banking legislation is sitting on the desk of the finance minister. It was after the fact that this private member's bill hit the floor that the government even mentioned in the fall economic statement. It is time to get this implemented. Let us get it done.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Madam Speaker, first of all, I thank my colleague for Bill C‑365, which is very interesting. I look forward to talking about it in my speech.

Many of these fintech companies are provincially regulated tech start-ups. In fact, the largest financial institution in Quebec, Desjardins, is a co‑operative operating under the provincial jurisdiction of the Government of Quebec and is not subject to federal legislation.

I would like to know whether my colleague has considered the need to align with Quebec's wish to consult and legislate in this area, and whether he is open to the idea of amending Bill C‑365 to prevent a situation where some banks are regulated under an open banking system and Desjardins, in Quebec, remains unregulated or not yet regulated. I wonder whether my colleague has thought about that aspect.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Madam Speaker, the member is a new addition to our industry committee; I look forward to working with him.

We see this across a lot of different spectra right now. This bill is asking for legislation. The legislation has to come forward. It is much the same as we are seeing with Bill C-27, and we have a much better privacy bill in Quebec, so I will agree with that. It is much the same as we saw today when we were talking about the problems with Manulife and Loblaw, and the fact that some of the legislation is provincial that is allowing Manulife to sole-source pharmaceuticals.

Yes, I agree with the member. We always need to look at the provinces, and we are looking at that with some of that legislation. However, let us get the legislation forward and passed, so we can all talk about it in the House of Commons and then get it passed for Quebec and all Canadians.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, can the member give a clear indication of how much consultation he did within the industry before tabling the legislation?

[Ryan Williams, Conservative, Bay of Quinte, ON]

Madam Speaker, I probably did a lot more than the government, because we have not seen a report; it is sitting on a desk. We do not even know what it has done for consultation.

I am just going to reiterate what the government has done, how long it has taken and why we are trying to get this through. The government announced, in 2018, that this would be in place by 2023. It hired an expert panel to weigh in, which reported back in the summer of 2021. The government then hired a new expert to come up with a framework in 2021, and the expert reported back. He was still being paid by the government, on the payroll, in early 2023. The report is sitting on a desk, and nothing has happened.

I have probably talked to just as many people in six months as the government did during its consultation, but I can say that all of them, every one of them, wants this legislation. Let us get this legislation in front of Parliament, and let us get it through.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, I think, in terms of a secure and stable financial sector, that is what Canadians want to see. It was not that long ago when Stephen Harper was the prime minister and we had a banking industry that came out of the 90s that was fairly healthy because of decisions that Jean Chrétien and Paul Martin put into place to protect our banking industry.

I say that because it is important for us to recognize that, as a party, we have gone the extra mile, whether it is consultations or ensuring that the best interests of Canadians were put first in protecting a vital industry that has to be there, healthy and strong and pushing for consumer protections and choice first and foremost.

Remember the first few years of Stephen Harper? We had banks that were going bankrupt around the world. The world was looking at Canada, asking how it is that Canada was doing so well in terms of not having banks going bankrupt. It was being attributed to the work that Jean Chrétien and Paul Martin did during the 90s.

In order to be able to do the things that we did back then, it required a great deal of effort and work. That is what we have seen since we were elected back in 2015. We have very much seen a proactive government taking a look at how to build and continue to strengthen Canada's middle class. That means we have to take into consideration what is happening in our financial industry.

The banks play a critical role. That is why we have seen budgetary measures dealing with the banking industry. Canadians should not be surprised. The member himself makes reference to the fact that we have been talking about it from 2016.

That does not surprise me. Of course we are going to be talking about many different aspects of the banking industry because we understand the importance of it, even when the pandemic hit Canada. It was a worldwide pandemic. We took a look at how we could pressure the banking industry, the financial industry, to ensure that small businesses and Canadians' interests were going to be best served.

We used tax dollars and government policy to ensure that small businesses and families were going to be protected during that pandemic, ultimately, I would suggest, saving many businesses from going bankrupt and ensuring that families had the disposable income when it came time to pay mortgages or even put food on the table.

What has the government done with respect to this specific issue that the member has raised?

It was not that long ago that we had the fall economic statement.

Because of the efforts of the Department of Finance and other departments, we were able to deal with the many different stakeholders. The member made reference to one area in particular but what about the consumer? What about the average Canadian? What about small businesses? What about the larger corporations or the family farms? I think we had a responsibility to do a thorough consultation. The idea is great, but it takes a lot of work to put it together.

It was coming together quite well. I was glad that many Canadians, our banking industry and consumer groups were very pleased with the fall economic statement. That is the statement they are voting against, I will remind the member. Some of my colleagues are a little more optimistic than I am but I suspect that they are going to vote against it.

However, within that statement is that commitment, based on the discussions, the consultations and the work with the many different stakeholders, including consumers. It is coming together, because at the end of the day we recognize that we need to modernize. That is not an option. It is one thing to have the idea today. We have had that idea for years, and we have been working on it.

When I opened up my first bank account, it would have been in the late seventies, and at that time one just walked into a bank. Mine was the Bank of Nova Scotia on Albert Street. It did not take too much to be able to open up a chequing account back then. People would be quite surprised to see how easy it was back then. Today, when we try to open up a bank account, there are many challenges. Many challenges that my constituents have are because of issues like ID and so forth. One has to have a bank account.

E-transfers are something that is relatively new. We have to look at ways of ensuring that privacy issues are dealt with. These databanks and the amount of information that our financial institutions have on the average Canadian are extreme. If we put in an application for a loan or even if we put in an application for a bank account, we can imagine the type of information that is gathered from banks or credit unions, and we will find that they likely know a lot more about us than we might think they do.

As a government, we have to ensure that the right to protect that information is also in place. We have to ensure that those financial transactions are not leading to financial exploitation of consumers. We are very much concerned with that. That is actually one of the motivating factors for the government to take action in terms of the budget that is going to be coming up in 2024, just a couple of months away, possibly.

I look forward to seeing that budget and the budget implementation bill that will follow it. I think, at the end of the day, that Canadians can feel confident, because it is not only traditionally that other prime ministers, whether it is Paul Martin or Jean Chrétien, have been there to protect our financial industry, along with consumers. We have seen that this government has not only continued that tradition but is now looking at a way we can assist by having what I call, though others would call it different things, “consumer-friendly” legislation that is going to ensure that Canadians are not being financially exploited because of fees for services and so forth.

The member talked a lot about banks. I think we underestimate just how important our credit unions are. Our credit unions are a lifeline to so many and provide such a wonderful service, including providing competition, and we need to look at ways we can enhance and support these credit unions in whatever way we can. I would like to give a shout-out to all those individuals who are involved at grassroots credit unions for the fine work they do in ensuring that we have even more competition in our financial institutions.

Yes, they do deserve a round of applause.

I can tell members that I believe that, as a governing political party, we have been there in the past, and that has been demonstrated. Other governments around the world were envious of Canada and the work we did during the nineties to protect the banking industry and to protect Canadians by doing that. We are carrying that tradition on today by ensuring that we continue to modernize, protect consumers and protect the industry.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Madam Speaker, I will start by thanking the member for Bay of Quinte for introducing the bill. It is a very interesting bill.

As surprising as it may be, this is the first time we have the opportunity to debate open finance in the House. Even the Standing Committee on Finance has never addressed this issue. So far, the discussion has been largely left to the experts and industry representatives. The Department of Finance, the Office of Superintendent of Financial Institutions, the Financial Transactions and Reports Analysis Centre of Canada, all those fine people, are currently examining the issue. As I said earlier, the same goes for the Autorité des marchés financiers, or the AMF, and Quebec's department of finance. In fact, back home in Quebec, we have Desjardins and other co-operatives.

It is also important to remember that the technology companies that would interface with customers in an open financial system are not banks. Essentially, they do not fall under federal jurisdiction, just as not all financial institutions fall under federal jurisdiction.

I have been closely following the work of the Advisory Committee on Open Banking, which is referenced extensively in the preamble of the bill. This work is very enlightening. The committee heard from a wide range of stakeholders, including banks, credit unions, insurance companies, trusts, brokers, technology companies, and the list goes on. My colleague talked about that. However, no consumer advocacy groups, privacy advocates or provincial regulators, such as Quebec's AMF, were consulted. It was therefore time to broaden the conversation. For that reason alone, the bill makes a huge contribution to the debate, and I thank my colleague once again for introducing it.

Implementing an open financial system constitutes a huge change with many implications. In the long term, we can envisage a system in which financial institutions would essentially be able to manufacture financial products. Customer relations would be handled by technology companies that would not offer the financial products themselves but would act as intermediaries and data aggregators. That is quite a change. The bill's preamble lists the benefits of such an open financial system. I will not repeat them here, as I think they have been clearly outlined. I would even say that it is inevitable that we will move toward an open system. It is going to happen.

Since this is the first time we are discussing this subject, I will use my time today to broaden the debate a bit, because there are also challenges and risks. It is our job as legislators to talk about all that, since we are working toward the common good.

Our financial system's greatest asset is its stability and the confidence that comes with that stability. It is stable because it is subject to very strict legal obligations. Ultimately, if something goes wrong, for example if there is fraud, data theft, failure to report a suspicious transaction that would enable the tracking of money laundering, and so on, then the financial institution is the one that is legally and financially responsible. These financial institutions are subject to strict prudential obligations so as to ensure they have the means of dealing with the risks in question.

Since the financial institutions are ultimately responsible, they currently guard their members' and customers' personal, financial or banking information very jealously. Again, the financial system's greatest asset is its stability. However, this is also where it becomes a weakness, because it can lead to compartmentalization and a lack of flexibility. The world has changed with all the new financial products online. The development of information technologies has given rise to the data economy, which requires the data to circulate more freely in order to grow. It is unclear whether our financial architecture is currently adapted to this new environment. That is the purpose of the bill.

A financial institution cannot be asked to be responsible for the use of data it no longer has custody of. Regulations and prudential standards will have to be adapted. It is far from certain that a technology company, on the other hand, has the wherewithal to take on the financial risks I mentioned earlier. For example, a financial start-up can be born and die in no time at all. That has been the case with several cryptocurrency companies. Caution is needed. That does not mean we should stand idle and fail to move towards a more open banking system.

People want the flexibility this kind of system offers. People want aggregators that put all their information in one place, facilitate transactions and give individuals an accurate picture of their financial situation. When money is tight at the end of the month, these applications and services are valuable, and there is demand for them.

People do not understand why they are not being allowed to do this with the technology available today. After all, our personal information belongs to us.

That is why fintech companies have already started coming on line despite the legal limbo. They are responding to an obvious demand. At this point, because they are not officially part of a financial system that makes sense, they exist in a grey area and find alternative ways to evolve.

Users currently provide their personal information themselves. When the app gets into an account, it extracts data from the screen and stores personal and confidential information. Financial institutions' secure networks get regular visits from actors outside the financial sector, and that makes them vulnerable. The more advanced these strategies get, the greater the risk to our banking system.

I was saying that the status quo is not sustainable. It would be pointless for legislators to bury their heads in the sand as though it were 1990.

In some cases, it must be said, the risks are minimal. An aggregator that scans public data to show us mortgage rates in one click is convenient and low risk. However, an aggregator that collects our personal data to give us a detailed picture of our financial situation is also convenient but riskier. Financial information is very sensitive, so it is vital to protect it. Furthermore, if the app can be used to perform transactions, which implies that it places orders, that opens up a whole new level of risk, the risk of fraud.

What about the principle of needing to know the customer? That principle is the foundation of our anti-money laundering and anti-terrorist financing laws. How can a financial institution apply this principle when it is communicating via an app?

Lastly, an important part of risk is the financial capacity to take on risk. Without that, the consumer could lose everything. Fintechs currently operate in a grey area, which is a problem. A clear framework is needed, with clear obligations and responsibilities, as well as oversight mechanisms and institutions to enforce compliance.

The advisory committee recognized all of these difficulties, but it felt that it was important to move quickly so that Canada would not be lagging behind and so as not to hamper the sector's development, a bit like what my Conservative colleague mentioned earlier. He also said that the companies continue to operate in a grey area, which is what is happening right now and is not serving anyone well. That is why the advisory committee recommended giving clear direction.

However, the committee also recommended minimal regulations so that things can move faster. Then, industry stakeholders can determine for themselves how to operationalize and resolve technical issues. In short, the committee is recommending a sort of self-regulation.

It recognized that the financial strength of technology companies is an issue, but it did not propose any institutional mechanism for dealing with it. There will not be any equivalent for deposit insurance, at least not in the beginning, when the new legislation comes into force, as the committee suggests. At best, the committee mentions that people should get their own insurance.

The committee also recognized the constitutional issue, but it proposed circumventing it. It proposes integrating the federal financial institutions. As for the others, for example, the large credit unions, they can join if they want to, but as second-class institutions, which is something we do not want to happen. As Quebeckers, whose main financial institution is a co-operative and not a bank, we understand that a two-tier financial system leaves much to be desired. Barring a constitutional amendment, the federal government cannot regulate these other institutions. Also, in order for the financial system to truly be open, the governments will have to coordinate.

I like Bill C‑365. It requires the government to introduce legislation in a timely manner. However, I am not so sure about the second clause. Setting a deadline for introducing legislation without ensuring that we are ready and that any potential problems have been resolved seems a bit hasty and rash to me.

In implementing such an open system, I would like us to follow the example of Emperor Augustus who said to make haste slowly. Let us get to work right away, because the status quo is no longer tenable, but let us take the time to get it right, because the risks are high. Specifically, let us do it right by properly consulting the Quebec government when it comes to regulating co-operatives.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Madam Speaker, I am, as always, proud to rise on behalf of the amazing people in North Island—Powell River.

Today, we are here talking about a private member's bill from the member for Bay of Quinte, Bill C-365. This is a very interesting bill. It is about consumer-led banking systems and Canadians. Happily, I have had some constituents come and visit me about this very issue, from the Coastal Community credit union in my riding. They talked about some of the really significant issues, especially for people living in rural and remote communities.

People may not have access to a bank at all in their community, or it may be a long distance to go to a bank. They may also be in a situation in which they have only one banking institution in their community and they want to go to a different one but cannot, because sharing that information can be incredibly complex. This is really key in this issue. It is making sure that people's personal banking information is accessible, so that if they find another bank that is going to meet the needs they have, they will be able to get that information sent in a way that is more transparent for themselves and for the banking system.

This PMB asks the Minister of Finance to table a plan for the implementation of open banking within 30 days of this act's coming into force. I think it is really important for us to all understand that in 2018, which is a while ago, the finance minister did create an advisory committee to look into this. In 2021 it delivered a report that included a plan for implementing consumer-led banking in Canada as early as 2023. Here we are in 2024, and it is still not happening. Again, it really is about making this more accessible.

I have heard from some of my constituents, and this is a particularly concerning area for me, who have apps that allow them to take multiple banks they are using and look at the information in a way that is comparable. The problem with these apps, of course, is that individuals are sharing all their banking information and all of their passwords and hoping that the app does not take that information or get hacked by somebody who might use it in a very negative way. This is very concerning, and it is something my constituents have been very concerned about.

This is the other part of this bill: If the minister cannot produce a bill within the associated timeline, within the first six months of the act's coming into force, the minister must table a report. That is so there is transparency and we understand what the holdup is and what the problem is.

We need to see these things done. When it comes down to it, I think what we have to assess very clearly is that competition is the key here. I have to thank my friend, the member for Windsor West, who has been doing a lot of work on competition. On our cellphones, some of the highest rates on the whole planet are here. Why is that? It is partially because we do not have appropriate competition. It is the same thing that we are seeing in our grocery stores. The gouging that is happening in our grocery stores correlates very clearly with the fact that big, wealthy CEOs are making huge profits and getting huge bonuses, and their shareholders are walking away with a lot of money.

At the same time as that is happening, everyday Canadians are struggling to feed their families. People who work in those grocery stores are often not being paid well enough to afford the food in the store they work in. I think Canadians know instinctively that it is just not a fair system anymore. What we are seeing in our system is more and more gouging. We are seeing it with the oil and gas industry, which is seeing record profits like it has not seen in years at the same time as people are trying to figure out how they are going to fill up their tanks.

I come from a rural riding. Some of our communities are extremely isolated, and it is not just putting gas into cars. It is putting fuel into boats to get to the places we need to get to for grocery shopping and for the basic necessities of life.

I really appreciate and see a lot more people in my riding buying electric cars. There are plug-ins, and I have seen them working in places like Wasa, which is a very small community but already has a plug-in station. People are using that, which is fantastic, but we still have a long way to go.

When people are suffering, we know that competition is at the very core of the issue. This is something that we actually start to take steps on, moving forward, to address the issue. When I think about competition, I have to think about basic human rights and the fact that some people are unable to afford the basic things. However, I have to say that, at this point, without a cellphone, a person might be able to get away with it if they are retired and in their 80s, but for most people today, it really leaves them unable to access things.

I work with a lot of seniors in my riding who are still figuring out how to use computers, and they are certainly not interested in any way in going to the public library to do their taxes. Therefore, we do things to help and support them. However, young people today know how to use everything. They know that, if they want to sign up for anything, make an appointment with a doctor or any of those basic things, they must have access. If it is too expensive, and if we have less and less competition, then the consumer pays, and that is a big problem in Canada.

Whether it be banking, grocery shopping or buying gas, it is all about the fact that we have let the ultrawealthy, with wealth that most Canadians can never even consider, walk away with lots of cash in their pockets as we are struggling. That is why the NDP continues to do the work that it does to make sure that there is more fairness.

Yesterday, I was left with a lot of fear and anger in my heart. I think that, when things happen to our country, as parliamentarians, we should always stand up in this place and talk about them. What is making me afraid and very angry is the fact that, in Alberta, the premier is now putting forward legislation to say that children who want to identify as who they are in school have to get permission from their parents. I think that is a horrifying reality of attacking the basic human rights of people.

If we look at our system in Canada, there are no things known legally as “parents' rights”. There are parents' responsibilities, and there certainly are children's rights. I hate to see any step in this country that will put children in a place where they are not safe. We know from statistics that children who come from the queer community are not always safe at home. They cannot always be honest with the people they love about who they are. If we do not give them a place where they can identify as they want to identify, we risk their very lives. I think all Canadians have to stand up against this.

In closing, last year, I read a beautiful Canadian book titled Falling Back in Love with Being Human, by Kai Cheng Thom. She is an amazing, powerful trans writer who does a beautiful job of articulating the power and fierceness of the trans community, as well as amazing beauty, strength and solidarity. I hope that, as we face this challenge, we remember that not only are these children and young people vulnerable, but they are also powerful and strong, and they are going to be pushing back really hard. As they push back, we must do our duty and make sure that they are not damaged. I hope all people in the House consider the safety of children.

I will conclude by reading Kai Cheng Thom, who wrote: “To build a better future, we need to learn how to transform in response to one another. We can't build a better world by getting rid of people; we can only build a better world by bringing them in.”

[Jasraj Singh Hallan, Conservative, Calgary Forest Lawn, AB]

Madam Speaker, let me begin by thanking my good friend, the member for Bay of Quinte, for bringing this private member's bill forward that is going to help Canadians.

The fast and furious finance minister speeds through the streets of Alberta but is as slow as a snail when it comes to legislation that actually matters. I thank my good friend from the Bay of Quinte for waking up the Liberals and hopefully waking up the finance minister to pass this legislation to help many Canadians and hopefully get our economy back on track.

Canada has a problem. Our country is getting poorer and so are our people. Since September 2022, the GDP per person has been declining. In fact, the real GDP per person was lower in the third quarter of 2023 than it was in the second quarter of 2018. That means five years of Canadians' wealth has been completely wiped out and the economy is less productive. Why is this important to the debate this evening? Because, fundamentally, getting GDP per person back on track relies on getting Liberal red tape and regulations out of the way and making the economy more competitive.

Philip Cross, the former chief economic analyst of Statistics Canada, has raised concerns about Canada's lagging productivity growth, pointing out that Canada's GDP per person growth rate is the worst since the Great Depression. In the past decade, productivity has only grown 4.3%, as opposed to the U.S., which saw a 47.4% growth rate. In fact, according to the OECD, Canada is last among developed countries for GDP per person growth, a statistic that the Liberal government even included in budget 2022.

William Robson, CEO of the C.D. Howe Institute said just this past December that business investment in Canada has not been this bad since the Great Depression. He pointed out that since 2015, capital per worker has been dropping while our population continues to climb, a situation that will lead to an even less productive and less wealthy economy.

Compared to the U.S., from 2014 to 2021, the Fraser Institute found that business investment per worker in Canada declined by 20%, while in the same period, U.S. investment per worker increased almost 15%. This context is important to this debate because it once again highlights the desperate need Canada has for more competition in all sectors of the economy.

According to the competition commissioner, Canada's already concentrated industries, such as banking, airlines, railways, telecommunications and groceries are only getting more concentrated. He noted that the barriers to entry are too high and too expensive. The red tape, the gatekeepers and Liberal anti-competition, anti-innovation, anti-modernization policies have shut down companies from around the world coming to Canada and from the private sector restarting growth in the economy.

Ninety-three per cent of all banking assets in Canada are controlled by the six biggest banks: RBC, TD, BMO, Scotiabank, CIBC and National Bank, as well as HSBC, which is being bought out by RBC. This has resulted in cookie-cutter services being offered at virtually the same price at all major financial institutions. Businesses and people want financial services that are tailor-made to their needs and that are accessible, easy to use and affordable.

The Canadian Federation of Independent Business recently published a study that shows that overall satisfaction by businesses in banks varies by size. Smaller businesses tend to trust credit unions and smaller financial institutions more as there is better customer services and more connection to their own communities, while medium and bigger businesses rely on larger financial institutions for access to larger amounts of financing. The options that these businesses have in finding the right institutions with the best services are shrinking.

Compared to the U.S., Canada has 34 domestic banks versus roughly 4,844 domestic American banks. That means there are roughly 121,000 Canadians for every bank, compared to just 66,000 Americans for every bank in the U.S.. In the U.S., there are almost 4,800 credit unions, while in Canada there are only 200.

Competition in any sector is vital to lowering the cost of the goods we buy and the services we use as consumers. More importantly, it also leads to innovation and modernization that will allow Canada's industries to compete globally. That is why consumer-led banking is key to the success of innovation in Canada's financial sector and for bringing home affordable banking solutions for all Canadians.

There are examples globally of this modernization actually working to bring home lower bank fees, better services and more economic growth. The prime example is the model of the U.K., where since 2017, the growth of consumer-led banking has been exceptional and, in fact, has saved businesses and individuals over 18 billion pounds, thanks to lower or no banking fees whatsoever.

The British government brought in consumer-led banking as a market-based fix for an overly uncompetitive financial sector, and between 2018 and 2023, the number of fintechs in the consumer-led banking space jumped from four to 295. There are more than seven million users of consumer-led banking in the U.K. and, as of 2022, they had made 68.2 million payments using this technology. For those users, banking and transaction fees are zero. This modernization has added billions of pounds to the U.K. economy, created thousands of jobs and created real competition in the financial sector.

Globally, the consumer-led banking market has grown to $128 billion as the U.K., most of the EU, Norway, India, Australia, South Korea, the Philippines, Brazil and Mexico bring consumer-led banking online. The U.S., Turkey, Israel, Saudi Arabia, Thailand, Malaysia, Indonesia, New Zealand, Japan and Taiwan are joining Canada in reviewing or setting up a consumer-led banking system. The success that the U.K. has had with this modernization, and the fact that major economies and trading partners with Canada are bringing consumer-led banking online, should be an indication that Canada needs to get the ball rolling.

However, more importantly than that, we see the benefits that consumer-led banking can have for people and businesses: the savings, the access to financial services and the freedom of choice. Fintechs in Canada are already building up the customer base, the technology and the services that will be important to making a modern banking system work. Questrade, Wealthsimple, Neo Financial, EQ Bank, Borrowell, Intuit and others are already building the components to offer competition, choice, and low-fee, tailor-made banking options to all Canadians.

In fact, credit unions are wanting to partner with fintechs to offer better services and products to their customers, but fintechs and credit unions need the government to get out of the way and let consumer-led banking go ahead. There are more companies that want to come to Canada, like KOHO, which just applied to the Office of the Superintendent of Bankruptcy to be considered a schedule 1 domestic bank and have access to the Canadian market.

After the Liberal-NDP government rammed through the RBC-HSBC merger without actually thinking of the Canadians who would be impacted by the decision, it is good to see that there are still fintechs and financial companies out there that want to do business in Canada. As common-sense Conservatives look to the future without the Liberal government and the fast and furious finance minister, our side is working with Canadians and businesses to develop real solutions that will bring home competition and productivity growth.

We need to focus on these common-sense solutions for Canadians and all newcomers. It benefits not only the people living here but also the many who will come here looking for a better future. When they come here, they get hit with Liberal-NDP high inflation, high taxes and a high cost of living. At least we can do this for them so they will have the freedom to move around their data and have more competition, which would lead to better products in the future.

It is clear; the common-sense Conservative team is going to axe the tax, build the homes, fix the budget and stop the crime. Let us bring it home.

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Alexandra Mendes]

It being 7:24 p.m., the time provided for the consideration of Private Members' Business has now expired and the order is dropped to the bottom of the order of precedence on the Order Paper.

The House resumed from February 1 consideration of the motion that Bill C-365, An Act respecting the implementation of a consumer-led banking system for Canadians, be read the second time and referred to a committee.

Consumer-led Banking Act

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Madam Speaker, I congratulate the member for Bay of Quinte for his private member's bill, in particular, on the topic of open banking. We know that open banking is becoming more and more commonplace, or at least the demand for it is, given the changes that are occurring in the banking sector.

It is clear that Canadians deserve a secure and stable financial sector that is globally competitive, promotes consumer choice and contributes to economic growth. As the financial sector becomes increasingly digitized, standards must be used to modernize, ensuring that Canada continues to enjoy a strong, stable and innovative financial sector. At the same time, Canadians must continue to have the confidence that the financial sector operates with the highest regard for privacy and security.

I will be honest. Before the bill was introduced, I did not really understand the details of open banking, how it would work or exactly what the benefit would be to consumers and clients of banking institutions. For those who do not know, and I would appreciate being corrected if my layman's understanding of it is incorrect, open banking pretty much gives the authority to a bank to share information with a third party in the event that somebody wants to share that information for one reason or another.

For example, as was explained to me, open banking might be utilized when somebody applies for a mortgage and wants to prove some of the data in their banking information, such as paying rent. Having the bank share that data with a mortgage lender that someone is applying to would obviously be of benefit in being able to provide credibility and information. It also relates to stability in terms of their ability to pay. The concept is very good, and I see it as being important. The way our banking system is going, and the manner in which it is being digitized, is something that all parliamentarians should be seized with in terms of properly empowering banks to do this.

What I understand from reading the private member's bill that has been tabled by the member for Bay of Quinte is that it would ask the minister to develop a plan within six months to stipulate exactly how open banking would work and ensure that it takes place. However, at the same time, during debate on the fall economic statement in the latter part of 2023, the Deputy Prime Minister and Minister of Finance had signalled that the framework for open banking specifically is coming forward.

One problem with the private member's bill is that it specifically stipulates a six-month period for the minister to table this. I hope we will see that happen faster as a result of the fact that the finance minister had already indicated she is working on this and that it comes at an expedited pace because we need to have those securities in place for Canadians who are sharing that information.

Most importantly, the one thing that seems to be lacking in the bill is any detail. Details are important in terms of making sure the proper measures are put in place to protect data and Canadians' information, and that is what I am expecting to see in the legislation that will come as a result of what was indicated during debate on the fall economic statement. The government has been working on this since around 2019. This has been on its radar. It is something that the government is seized with. Whether it comes through this private member's bill or government legislation, at the end of the day, I think there will be unanimous support from all members in terms of ensuring that open banking becomes trusted and secure and that Canadians can use it with confidence.

The specific framework that the government will be putting forward would enable consumers to securely and confidently access their financial data and, in turn, safely use services that can help them improve their financial outcomes. However, the private member's bill before us is a plan that would see the government move slower on open banking than our current timeline is projecting, and the bill puts forward, as I indicated, no or very little detail on the implementation of a consumer-driven banking regime. We plan to continue to engage with Canadians, industry leaders and stakeholders on this and to establish this consumer-driven banking framework in a manner that respects the collaborative process.

I certainly want to congratulate the member on the introduction of the bill. It is a timely issue and a subject that is certainly something the government has been working on. It is something that we plan to bring forward, and due to the fact that the bill before us lacks detail on how the implementation would occur and how those safeguards would look, I think it would more prudent for the House to wait until that legislation comes forward, which would have the proper scrutiny in the House rather than just two hours of debate. It would go to committee, have the proper scrutiny there, come back here and once again have the level of discussion and discourse that is required for something as important as this.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I would like to thank the member for Bay of Quinte for introducing Bill C-365. As surprising as it may be, this is the first time we have had the opportunity to debate open finance in the House. Even the Standing Committee on Finance has never addressed this issue. So far, the discussion has been largely left to the experts and industry representatives. All the fine people at the Department of Finance, the Office of the Superintendent of Financial Institutions and the Financial Transactions and Reports Analysis Centre of Canada are currently examining the issue. The Autorité des marchés financiers, or AMF, and Quebec's ministry of finance are also looking into it. It is important to remember that the technology companies that would interface with customers in an open financial system are not banks. They do not necessarily fall under federal jurisdiction, just as not all financial institutions fall under federal jurisdiction.

I have been closely following the work of the Advisory Committee on Open Banking, which is referenced extensively in the preamble of the bill. This work is very enlightening. The committee heard from a wide range of stakeholders, including banks, credit unions, insurance companies, trusts, brokers and technology companies. However, no consumer advocacy groups, privacy advocates or provincial regulators were consulted. It is past time to broaden the conversation. For that reason alone, the member is making a huge contribution and I sincerely thank him for it.

Implementing an open financial system would be a huge change with many implications. In the long term, we can envisage a system in which financial institutions would essentially manufacture financial products. Customer relations would be handled by technology companies that would not offer the financial products themselves but would act as intermediaries and data aggregators. That is quite a change. The bill's preamble lists the benefits of such an open financial system. I will not repeat them here, as the sponsor did a fine job outlining them. I support them. They are real. I would even say that moving toward an open system is probably inevitable.

Since this is the first time we are discussing this subject, I will use my time today to broaden the debate a bit. It is our job as legislators to talk about the benefits, but also the challenges and risks, since we are working toward the common good.

Our financial system's greatest asset is its stability and the confidence that comes with that stability. It is stable because it is subject to strict legal obligations. Ultimately, if something goes wrong, for example if there is fraud, data theft, failure to report a suspicious transaction that would assist in tracking money laundering or terrorist financing, then the financial institution is the one that is legally and financially responsible. Financial institutions are subject to strict prudential obligations so as to ensure they have the means of dealing with the risks in question. Since the financial institutions are ultimately responsible, they guard their members' and customers' personal and financial information very jealously. However, this is where the system's greatest asset, its stability, also becomes a weakness, because it can lead to compartmentalization and a lack of flexibility.

The world has changed. The development of information technologies has given rise to the data economy, which can only grow if data circulates freely. It is unclear whether our financial architecture is adapted to this new environment. A financial institution cannot be expected to take responsibility for the use of data it no longer has custody of. Prudential standards and regulations will have to be adapted. It is far from certain that a technology company has the wherewithal to take on those financial risks. A financial start-up can be born and die in no time at all. If that happens, there will be no one left to shoulder the consequences of fraud, data leakage, incorrect information or poor financial choices. We need to be cautious.

Does that mean we should do nothing? Far from it. People want the flexibility of an open financial system. They want aggregators that put all their information in one place, facilitate transactions and give individuals an accurate picture of their financial situation. That is invaluable when money is tight at the end of the month. People also have a hard time understanding why they are not being allowed to do this. After all, our personal information belongs to us.

That is why fintech companies have already started coming on line despite the legal limbo. They are responding to an obvious demand. At this point, however, because they are not officially part of a cohesive financial system, they exist in a grey area and find alternative ways to evolve. Users currently provide their personal information themselves, and when the app gets into an account, it extracts data from the screen and stores it.

Financial institutions' secure networks get regular visits from actors outside the financial sector, and that makes them vulnerable. The more advanced these strategies get, the greater the risk. As I was saying, the status quo is not sustainable. It would be pointless for legislators to bury their heads in the sand. There is no going back to 1990.

In some cases, the risks are minimal. An aggregator that scans public data to show us mortgage rates at all financial institutions in one click is convenient and low-risk. When it collects our personal data to give us a detailed picture of our financial situation, that is also convenient, but carries more risk. Financial information is very sensitive, so it is vital to protect it. If the app can be used to perform transactions, which implies that it places orders, that opens up a whole new level of risk, the risk of fraud.

What about the principle of needing to know the customer? That principle is the foundation of our anti-money laundering and anti-terrorist financing laws. How can a financial institution apply this principle when it is communicating via an app? Lastly, an important part of risk is the financial capacity to take on risk. Without that, the consumer could lose everything. Fintechs currently operate in a grey area, which is a problem. What we need is a clear framework with clear obligations and responsibilities, as well as oversight mechanisms and institutions to enforce compliance.

The Advisory Committee on Open Banking recognized all of these difficulties, but it felt that it was important to move quickly so that Canada would not be lagging behind and so as not to hamper the sector's development. Companies continue to operate in a grey area, which is not serving anyone well. That is why the advisory committee recommended giving clear direction but introduce minimal regulations so that things can move faster. Then, industry stakeholders can determine for themselves how to operationalize that and resolve technical issues. In short, the committee is recommending a sort of self-regulation.

The committee recognized that the financial soundness of technology companies is an issue, but it did not propose any institutional mechanism for dealing with it. There would not be any equivalent for deposit insurance, at least not in the beginning. At best, the committee mentions getting their own insurance. The committee also recognized the constitutional issue, but it proposed circumventing it. It proposes integrating the federal financial institutions. As for the others, they can join if they want to, but as second‑class institutions.

I am a Quebecker whose main financial institution is a co‑operative, not a bank. Understandably, a two‑tier financial system leaves much to be desired. Barring a constitutional amendment, the federal government cannot regulate them. Also, in order for the financial system to be truly open, governments will have to coordinate. I really like the first clause of Bill C‑365. It requires the government to present directions and an action plan in a timely manner so that the public can take ownership of it and we can debate it. That is good. I am not so sure about the second clause. Setting a deadline for introducing legislation without ensuring that we are ready and that any potential problems have been resolved seems a bit rash to me.

As we consider the implementation of open banking, let us heed the Emperor Augustus and make haste slowly. That is essentially the message I am getting from the Speaker, who wants me to wrap up. Let us get to work right away because the status quo is no longer tenable, but let us take the time to do things right, because the stakes are high.

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Alexandra Mendes]

I would like to thank the hon. member for sharing yet another wonderful expression.

The House resumed consideration of the motion that Bill C-365, An Act respecting the implementation of a consumer-led banking system for Canadians, be read the second time and referred to a committee.

[Matthew Green, NDP, Hamilton Centre, ON]

Madam Speaker, I appreciate the capacity crowd that is here tonight on this riveting PMB. This is indeed a very important moment in Canadian history.

This is a full-circle moment for me, because it allows me the opportunity to revisit the first time my words ever entered into Hansard, which would have been September 27, 2016. Also, when I was a city councillor, I provided testimony to OGGO, which had a special committee on postal banking. The reason I bring that up is because the hon. member for Bay of Quinte, whom I rather enjoy, does a phenomenal job of talking about all of the certitudes of capitalism, all the symptoms, ills and all the ways in which regulatory capture in cartels and monopolies shape our Canadian economy, and yet sometimes, well most of the time, in fact, all of the time, Conservatives just really seem to miss the target. While it is true we will likely be supporting this, I do not think that it actually speaks to the issue of the way in which the cartel banking system has captured the Canadian economy, and I will tell members why.

I come to my politics through observation. Back in 2014 when I was running to be a city councillor in Hamilton, my campaign office was right across the street from a payday loan company. At the end of every month, about a week to go in a month, I watched people start to enter payday loan centres. It was at that time I got to understand that most of the people who were entering those predatory, economically violent and, dare I say, extortionary businesses were already on a fixed income, many were already on social assistance, and many were hard-working people who just did not have enough money due to their legislated poverty to make it to the end of the month, and so they would visit these predatory loan companies.

In the process of trying to better understand the fullness of this economic violence on people, I came to understand that the Canadian Union of Postal Workers had presented what I thought was a very sound and fair banking policy: postal banking. The reason I bring this up on this PMB debate is because, yes, it is obvious that every consumer should have the right to have data sovereignty over their own information and that it should not be held hostage or be under some kind of extortionary measure by a cartel bank preventing them from transitioning seamlessly to another. That is a basic tenet of a fair economy and one that I think everybody should support, but it does not speak to the heart of the matter. If we are going to talk about open banking, what we need to talk about is decommodified banking for the most vulnerable among us. For example, a person receiving a social assistance cheque or ODSP who does not have the ability to actually have a bank account would then see that meagre $720 or $1,200, in Ontario, have fees added onto it.

When we talk about predatory violence, I look to the work of ACORN, which does incredible work on this and on fair banking. It has identified, quite rightly, the way easyfinancial, Money Mart and Cash Money charge interest on loans. For example, on a loan of less than $1,500 that is supposed to be paid back in two weeks, and we know that if a person on a fixed income does not have the money at the end of the month then that person would probably not have it in the months to come, the annual interest rates actually compound to somewhere between 400% and 600%. However, federally, we legislate extortion or loan sharking at 60% plus interest and other charges. So, when we see loans in this predatory sector go up 300% between 2016 and 2020, ACORN did the right thing and launched a campaign on this.

I am proud to say that another full-circle moment for me in this conversation was as a city councillor when I was responsible for moving a motion that actually created the first municipality in Ontario to regulate payday loans in our municipalities.

I am a proud Hamiltonian from Hamilton Centre, which is the birthplace of Tim Hortons. At its peak, there were more payday lenders in Hamilton Centre than there were Tim Hortons. Do members know who the president of the Payday Loan Association was at that time? Many members on the government's side will know this person well. It was Stan Keyes, a former Liberal member of Parliament who was basically shilling for the predatory and extortionary payday loan sector. What happened? By the time we were done with him, we had run him out of Hamilton. They had to change the name of that association.

Why do I bring it back to that? It is because the most vulnerable Canadians among us do not have to worry about whether or not they can move their information from bank to bank. They cannot even get into a bank. How can we enter into a conversation about open banking when not every Canadian has access to a bank?

I want to go back to the Canadian Union of Postal Workers. The Conservatives did the cut and gut on it and tried to privatize Canada Post. Then the Liberals, of course, followed suit shortly thereafter. They looked at ending door-to-door service and all the other things Canadians rely on. We took them to task, and the Canadian Union of Postal Workers came forward with a beautiful program called Delivering Community Power. Part of that plan was postal banking.

Members may or may not know this, but within the charter of Canada Post is the ability to offer postal banking. We cannot have a conversation about open banking unless we are providing banking for everybody in this digital economy. At a time when everybody relies on the ability to transfer monies to and from, it is not just about their information, but also about the freedom to have a decommodified banking sector.

When I say decommodified, I am referring to the cartels that we have allowed to be created in this country. This is where I will give credit to the member for Bay of Quinte because he understands the point, as I have heard him talk about it. The cartel here has created a scenario in an economy where we pay the highest interest rates on credit cards. We pay the highest amounts on service fees.

When I was a small business owner, I went in to do a cash deposit. I saw a $5 fee that said “CD Fee”. I asked them, “What the heck is this?” It was a cash deposit fee. A bank was charging me a $5-a-month fee to simply deposit cash into a bank account. That is preposterous. We need to rein this in, which is why this is a positive first step. However, any step, absent taking control of our banking sector from the regulatory capture of the five major bank cartels in this country, falls short.

We have an opportunity within the charter of Canada Post. We have infrastructure. I referred to Tim Hortons and how ubiquitous that is in Canada. Guess what? Across the country, dotting the country, there are small postal offices ready to deliver postal banking. For example, they are in the north, near indigenous, first nations, Métis and Inuit communities. They are already there, and all we have to do is give them the opportunity. We just have to give them the opportunity to provide basic banking services to people.

This is so that, if someone is on a fixed income and receiving their monthly social assistance, whether it is Ontario Works or ODSP, rather than being extorted by the payday loan sector, they could go into their local post office, take that money out and try to keep up in an economy that is leaving far too many behind.

It is laudable what my friend from Bay of Quinte is doing, who I consider to be a learned member of Parliament and somebody who understands the harms caused by capitalism. I would challenge him to go further than just tinker around the edges of an open banking system and let us go all the way. Let us go all the way and open up banking for Canadians from coast to coast to coast, regardless of how much money they have and regardless of where they live.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Madam Speaker, I will start my speech with a couple of important messages.

Recently, we saw the passing of Daryl Kramp, who was an amazing member of Parliament and a personal mentor to myself. I give my best to his family going forward. He was a legend of a man who really contributed to his family, to his community and to this place as well.

I would also like to give a shout-out to the member for Elmwood—Transcona. He has announced his resignation from this place. He was a treat and a treasure to work with at the finance committee. He was always well prepared and always dedicated to the people of his riding.

With that, I will start my talk on open banking. Open banking is an area where Canada should be focused. As I have stated numerous times, Canada has a productivity crisis. We are said to be one of the lowest productivity countries in the world. In fact, we are on a trajectory, if this continues on this path, where we will not even be considered an advanced economy anymore. We have such low levels of productivity relative to the United States and other countries. Open banking is low-hanging fruit. It is a relatively easy fix for the government to lift up our productivity. I will unpack what I mean by that.

First, I want to talk specifically about the member for Bay of Quinte's private member's bill, which would force the government to do a couple of things. The first would be, within six months, to implement open banking, and the second would be to make public a report that was produced for the finance department. These are absolutely critical steps to pushing this along.

What is open banking, or consumer-led banking? Let us start there. It is the ability for clients to own their own data and to move their own data to the financial institutions that they choose. Currently, we have a system for transferring data within financial institutions that is not much above an abacus. It actually involves the transfer of paper, physically bringing documents and transferring one's data to other financial institutions.

This creates barriers for people to transfer their financial data from one institution to another. Like most Canadians, I have a number of payees on my online banking, and I have information saved on there. It would literally take me hours to rebuild that data and to move that data to another financial institution. That creates a barrier so that Canadians do not shop for the best rates. I would disagree with my colleague who spoke prior to me, although I respect him. We have different perspectives, but we want to get to the same place.

It is my heartfelt belief, as I believe it is for most Conservatives, that competition is the way to bring fairness to the banking system. Ultimately, it is about having a level playing field where we have small, big and medium-sized players all competing for Canadians' business and where we will have success. Open banking structures that playing field. While I would disagree with the member that we do not need direct government intervention, what we do need is government to set in place the legislative framework for institutions to be able to compete fairly.

In the failing of doing that, what we actually have is a cumbersome system where Canadians cannot transfer their financial data. This means that if people get a bill from whatever major bank, see that their fees were $50 and think it is unfair, then in an open banking system we would be able, with a couple of clicks of the mouse, to make those banks work for our business, as opposed to people working for them.

Everywhere open banking has been tried, it has been tremendously successful on a number of fronts, and one is affordability. As I said, competition is the magic elixir, the magic pill that would fix many ails in the economy. It makes businesses compete for people's business. It lowers costs and improves services to deliver better value. In an open banking system, everywhere it has been tried, it has driven down the costs for consumers.

Canadians pay billions and billions of dollars every year to financial institutions. For that, they are, relative to their competitors across the world, not, in my opinion, getting the best value. In order to increase that value, to get that better value, we need to enable competition, but right now, as I said, the cumbersome system of data transfer is preventing that competition from occurring.

I actually believe it could be great for our banks and great for our financial institutions, because it would make them stronger. It would make them compete.

Ultimately, we want Canadian businesses, large, medium and small, to succeed, not only here in Canada but across the world. If they are put in an arena here in our country where they become stronger and better able to compete globally by having strong domestic competition, they are then strengthened and able to bring some of that great Canadian know-how, some of that great Canadian entrepreneurship, across the world.

The other area where it will help our economy is with respect to entrepreneurship. Right now, in Canada, as I said, we are unfortunately one of the lower-productivity countries in the OECD and forecast to be one of the lowest for the foreseeable future.

Just to give an idea, we measure it by GDP per hour, per worker. That is the general stat, the metric by which it is measured. Canada is down around $50 per worker. The U.S. would be at $75. Countries like Switzerland are up at over $100 per hour, per worker, so we have a substantial problem.

One of the issues that we have is, of course, competition, which I have talked about, but also growing our new and small businesses, our innovators, to take that next level.

The challenge is that they often, in the Canadian finance ecosystem, find it challenging to obtain proper financing, to grow from that small business, that idea, into a big business. What happens is that many of those small businesses actually have to leave our country to attract the financing they need.

They go all over, around the world, of course, most notably to Silicon Valley down in the United States, but also all over the world, to where they can attract more capital.

What open banking does is to allow greater transparency at the request of the business or the individual, which gives the bank or the financial institution or the lender of any sort greater confidence in lending that money out to these institutions, and gets it to them more quickly.

Often, especially in the tech space, technologies like artificial intelligence are not changing by the year or even by the month or even by the week. It is a daily thing. One needs to get that financing, that cash, to those businesses as quickly as possible. Currently, in the financial ecosystem, we hear story after story that innovators are not getting that capital quickly enough.

Just to give a quick story, a friend of mine is an individual who came over here to Canada as a refugee from abroad. He actually went and got his Ph.D. and was in an IT field and desperately wanted to give back to the country that had given so much to him. It broke his heart that he ended up having to move to the United States because there just was not the financing here for his idea.

He was the number seven employee in a company that went on to be worth billions of dollars. That could have been done right here, right in Canada.

I think this is a fantastic bill. I think the member for Bay of Quinte has done a great service for his community and for Canada. I believe we should give it unanimous support to get this bill through as quickly as possible, so that we can increase the competitiveness of the Canadian economy and improve affordability in the Canadian financial sector. We owe it to Canadians to get this done and to get it done quickly.

[Annie Koutrakis, Liberal, Parliamentary Secretary to the Minister of Tourism and Minister responsible for the Economic Development Agency of Canada for the Regions of Quebec]

Mr. Speaker, I am pleased to have the opportunity today to participate in the debate on Bill C-365, an act respecting the implementation of a consumer-led banking system for Canadians. This is a private member's bill.

Bill C-365 would require the Minister of Finance to table in each House of Parliament, within 30 days of the bill's passage, a plan to implement an open banking system in Canada and a bill to implement an open banking system in Canada within six months. I could stop there, because that is a plan that would see the government move more slowly on open banking than it already is. The Minister of Finance has already announced that budget 2024 will include legislation for the implementation of consumer-driven banking.

Instead, I will take a moment to underline the importance of this file and why we should reject a private member's bill that would impose a lax deadline and no details on the implementation of a consumer-driven banking regime. Consumer-driven banking, also known as open banking or consumer-driven finance, refers to systems that allow people and businesses to securely transfer their financial data to different financial services providers, such as apps that use data to provide automated budgeting and savings advice. Individuals can access services that allow them to build their credit by proving they have paid rent on time, for example.

It is expected that consumer-driven banking would empower Canadians to securely access and share their financial data, ensure that Canadians are not subject to fees when accessing and sharing their data, protect Canadians and the financial system from risky practices like screen scraping, ensure that parties at fault are liable for any damages or data breaches, and allow Canadians to safely access innovative products and services that can help them improve their financial outcomes.

The issue now is that without consumer-driven banking, Canadians, by default, currently share their banking credentials with entities other than their bank in order to access data-driven financial services, while there are no rules around the practice. This can be worrisome for many Canadians. Personally, it makes me feel uneasy. Like many other Canadians, I am concerned that the non-secure, unregulated practice called screen scraping leaves us open to security, privacy and liability risks in the event of data breaches or losses. That is why giving Canadians control over their own financial data is so important.

That is exactly what our government wants to do. Indeed, we support the implementation of consumer-driven banking. We have already made a lot of progress in this direction. However, such a system needs to be defined by clear rules to protect consumers.

Last fall, the Minister of Finance indicated in the 2023 fall economic statement that the government intends to introduce framework legislation for implementing consumer-driven banking in the 2024 budget. This framework legislation will propose a phased-in approach to scope, oversight of the technical standard, and a timeline for phasing out screen scraping.

In line with international best practices, the aim of our legislation will be to codify key elements including scope, common rules for addressing liability, privacy, security, accreditation and management of technical standards; mandate a government-led governance entity responsible for monitoring and supervising the system, enforcing common rules, accrediting and updating mandated technical standards; and address liability among industry participants.

Our work will be framed by three major policy objectives. First, we are aiming to ensure the continued safety and soundness of the financial sector by addressing the security risks arising from existing data sharing practices such as screen scraping, and by establishing oversight of financial data sharing activities. Second, we want to ensure that Canadians can securely and confidently access and use their financial data to improve their financial outcomes. Third, we want to establish a cohesive framework with a clear, fair and transparent approach to accreditation, to support the continued security and stability of the Canadian financial sector, including existing financial institutions.

It is important for our government to ensure Canadians benefit from effective oversight of financial data sharing. That is why our framework will mandate a government-led entity to supervise and enforce the framework.

To facilitate oversight of provincial entities while respecting their jurisdiction, a model that permits provincial entities to opt in to governance, supervision and participation will be developed.

Naturally, governance design is key to ensuring the framework achieves the public policy objectives, which in this case are safety, stability, innovation and utility for all Canadians.

With a strong governance framework, we will be able to ensure participants abide by common rules by outlining clear roles and responsibilities for participants and government, and what actions will be taken when non-compliance occurs.

I am glad to see that, after significant consultation and review, there is now broad alignment among stakeholders with the government's proposed approach. The day after the fall economic statement, the Canadian Bankers Association was quoted as saying that it welcomes “the clarity provided in the Fall Economic Statement” and that it will “continue to work collaboratively with the government on implementing a consumer-driven banking regime in Canada.”

Furthermore, Canadian fintechs were also reported to be supportive of the government's plan, as outlined in the fall economic statement and policy statement. The framework proposed by our government aligns with those of our largest trading partners, including the United States.

As members can see, consumer-driven banking is something that we support and are acting on. This framework is necessary to establish a system that enables secure financial data sharing. The Minister of Finance has already announced that budget 2024 will include legislation for the implementation of consumer-driven banking.

In order to do that, we continue to work closely with industry, federal regulators, provincial and territorial governments and other stakeholders.

It is clear that, with all the progress we are making on creating a consumer-driven banking system, Bill C-365 is not necessary. It will be obsolete before it is even voted on.

That is why I will vote against Bill C-365, and I invite my hon. colleagues to do the same.

[The Deputy Speaker, Chris d'Entremont]

I recognize the hon. member for Bay of Quinte for his right of reply.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Mr. Speaker, it has been a pleasure to hear the debate and to present my first private member's bill when it comes to open banking here in Canada.

This bill was to do two thing. It was to ensure that we provide the opportunity for businesses to participate in Canadian banking, in fintechs, and it was also to ensure the government did what it promised.

Before I start that, I just want to make a quick comment. The Right Honourable Prime Minister Mulroney has passed away, and to his family, to Caroline, to Ben and others, I give our sincere condolences. A favourite quote of mine from Brian Mulroney was, “Canada must strive to be a beacon of hope, a model of prosperity, and a nation that works for all its citizens. ” Rest in peace, to Brian Mulroney.

I am encouraged by the speeches tonight by the members for Hamilton Centre and Jonquière, who talk about the need for open banking. We brought this bill forward because it has taken six years to get legislation promised to Canadian fintechs and to Canadians themselves to get competition in Canada. Canada has a monopoly problem. We have a major problem, where we have major regulations that ensure we have oligopolies and monopolies in the grocery sector, and we are paying some of the highest prices in the world in the airlines, in telecommunications and in banking.

The solution to banking is open, or consumer-led, banking. This bill would do two things. It would ensure there is legislation presented within six months, and it would make the government table a report that has been on the minister's desk since May 2023. For six years, we have been waiting.

Canadians and fintechs are saying one thing, and one thing very clearly, to me; they cannot wait anymore. They do not believe the Liberal government will present this legislation in the March budget, even though it has been in the fall economic statement. They do not believe that it may even be in the next fall economic statement. By passing this bill, parliamentarians can ensure that open banking comes before discussion in the House of Commons and also in the other House. In doing so, we would help the fintechs that are desperately asking us to ensure we get open banking implemented in Canada.

Those fintechs are providing good wages at a time when start-ups in Canada are low, and we need more businesses with more powerful paycheques. More importantly, Canadians need better options for banking. I heard my colleague, earlier, talk about different options for all types of Canadians for banking. There is a company called Borrowell that actually has a fintech app, through open banking, which actually builds credit scores by tracking one's payment of rent. That is a great example of what a fintech business and what open banking would do for all Canadians.

More importantly, this bill would ensure that we could fix the problem in banking. One-third of Canadians are upset with their banking institution, 70% of Canadians have had the same bank account for 11 years, and 80% of Canadians have never switched bank accounts. We have a major oligopoly problem in Canada, with five Canadian banks now controlling 90% of mortgages and with HSBC being bought by RBC.

This bill would create competition, and when there is competition in Canada, that gives benefits through freedom of choice to Canadians and that gives them savings. In the U.K., with the bank accounts for people living in the U.K., they pay zero dollars for transactional fees, zero dollars for overdraft fees and zero dollars for monthly fees. Canadians would save $400 a year if this is implemented.

I am happy to see the discussion. I am hoping to see that we get the vote through Parliament so that we can talk about open banking in this place and in the Senate. We can help fintechs, but more importantly, help Canadians. Let us bring open banking and consumer-led banking, and let us bring it home.

[The Deputy Speaker, Chris d'Entremont]

The question is on the motion.

If a member participating in person wishes that the motion be carried or carried on division, or if a member of a recognized party participating in person wishes to request a recorded division, I would invite them to rise and indicate it to the Chair.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Mr. Speaker, we request a recorded division.

[The Deputy Speaker, Chris d'Entremont]

Pursuant to Standing Order 93, the division stands deferred until Wednesday, March 20, at the expiry of the time provided for Oral Questions.

The House resumed from February 29 consideration of the motion that Bill C-365, An Act respecting the implementation of a consumer-led banking system for Canadians, be read the second time and referred to a committee.

(The House divided on the motion, which was agreed to on the following division:)

Vote #671

[The Speaker, Greg Fergus]

I declare the motion carried.

Accordingly, the bill stands referred to the Standing Committee on Finance.

(Bill read the second time and referred to a committee)

[Seamus O'Regan, Liberal, St. John's South—Mount Pearl, NL]

Mr. Speaker, I had difficulties with the app. I am hoping there will be unanimous consent to have my vote counted in favour.

[The Speaker, Greg Fergus]

Is it agreed?

[Some hon. members]

Agreed.

[The Speaker, Greg Fergus]

I wish to inform the House that because of the deferred recorded divisions, Government Orders will be extended by 36 minutes.