Finance Committee on May 10th, 2006

[Serge Dupont]

It's simply the basic rules of the market. As you bring more suppliers into a market, that tends to provide either better prices, better services, or better outcomes for the demand side of the market. In this case it's the financial institutions directly, and the consumers indirectly.

[Garth Turner, Conservative, Halton, ON]

So it's just a theoretical supposition that competition breeds lower prices and better service across the board.

[Serge Dupont]

I think it's a general proposition in the domain of economics.

[Garth Turner, Conservative, Halton, ON]

But we haven't done any research, and we haven't talked to the stakeholders.

[Serge Dupont]

The stakeholders could have a different view about whether competition is a good thing. But I would hold that in general competition flows through and benefits the demand side of the market.

[Garth Turner, Conservative, Halton, ON]

So you haven't talked to experts like Clayton Research Associates, independent analysts who look at these issues and determine the likely impact on consumers.

I'm asking this because the stakes are fairly high right now to make a fundamental change in the mortgage insurance marketplace, are they not?

[Serge Dupont]

I understand. I guess to some extent the same questions could have been put to officials when the first private sector provider was brought into the marketplace. I think the judgment over the years is that it's been a good thing; that Genworth has made a good contribution to the marketplace, alongside CMHC, and that other competitors may also bring new innovations, new ways of doing things, new products or services to the marketplace that would also be a good thing.

[Garth Turner, Conservative, Halton, ON]

But are we not concerned about a diminution of service? I'm thinking particularly about some rural areas and some parts of the marketplace--people with less-than-perfect credit who may not be as well served when the major players are now in greater competition to retain their market share and their bottom line. Obviously it's easier to go for the well-heeled, urban neighbourhoods where there's less risk for these guys than in the regions, or with people who have imperfect credit who also deserve to buy homes.

[Serge Dupont]

I guess whether one has a monopoly or there are two or three corporations, there will perhaps be some more attractive segments of the markets than others. If these markets are being served now, it's not necessarily obvious why they would not be served if there were more competitors in the marketplace.

[Garth Turner, Conservative, Halton, ON]

Is one of the major advantages you're visualizing lower insurance premiums for high-ratio mortgages?

[Serge Dupont]

Or it could be some form of better service. The marketplace will decide what the innovations will be, whether in terms of product, price, or servicing. That will be for the marketplace to determine.

[Garth Turner, Conservative, Halton, ON]

Mr. Chairman, we seem to have something before us that is based on no research and no consultation. I'd like to make a motion that this committee invite experts here to give us answers to the questions being asked. I think the stakeholders and independent industry sector analysts should be invited here.

Before we vote this in, change the marketplace, and impact the most expensive real estate market we've ever had in our country—in which, as I've said, half of all mortgage takers today get mortgage insurance—we need to know what we're talking about. With respect, I don't think we do right now.

I would like to make that motion, please.

[The Chair, Conservative, Brian Pallister]

Mr. Turner, to facilitate that, the committee has adopted a rule that you have a 48-hour notice for motions. Of course, you could do that.

To satisfy you, I would mention that we're not going to be proceeding with votes on this until probably the middle of next week. So you have ample time to bring a notice of motion forward, and we can deal with it as a committee at that time.

[Garth Turner, Conservative, Halton, ON]

Didn't I just do it?

[The Chair, Conservative, Brian Pallister]

You have to give notice of motion. You wish to do a motion; you said you wanted to move. I suggest you have to make a notice of motion.

Your time is up.

Over to you, Mr. McKay.

[Garth Turner, Conservative, Halton, ON]

Notice of motion.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Thank you, Mr. Chair.

[Garth Turner, Conservative, Halton, ON]

Could I ask if there might be unanimous consent on the part of the committee to invite these people to come and chat with us?

[The Chair, Conservative, Brian Pallister]

What you've just done is give a notice of motion.

[Garth Turner, Conservative, Halton, ON]

Could I ask if there might be unanimous consent from the members of the committee that we proceed to invite these particular people to come before us, so we know a little more about how to vote on this issue?

[The Chair, Conservative, Brian Pallister]

You need the unanimous consent of the committee to overturn the rules we've adopted as a committee. If you wish to do that, then we would be dealing with the motion at this point and not at our next sitting. I can ask the committee if they would like to give unanimous consent to that.

Yes, Mr. McKay.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Perhaps I could speak to it briefly.

[The Chair, Conservative, Brian Pallister]

Yes, briefly.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I think Mr. Turner is actually on to something. This is a significant public policy change with fairly significant implications in other areas with respect to mortgage insurance. It should be explored: i.e., the 75% versus 80% versus 85%, why CMHC has 100% but Genworth has 90%, and such things. I think it's a rather significant public policy issue.

We would be interested in exploring this public policy issue, and if it's necessary for the purposes of Mr. Turner's motion, we would waive our 48 hours. But if in fact this is not going to come up as a vote today, then we may accomplish the same thing.

[The Chair, Conservative, Brian Pallister]

That's my earlier point. To be clear, we're on the topic right now of waiving the 48-hour notice requirement we adopted just last week. Now, if this point is to that, please proceed; if not, then we'll move on.