Finance Committee on Feb. 20th, 2007

[The Vice-Chair, Liberal, Massimo Pacetti]

Good morning. We're going to try starting.

We don't have the ordre du jour because it's apparently 20-something pages long, so it's being photocopied. I suggest that we start and then we'll try to do this with the least amount of pain as possible.

Can I get the unanimous consent from everybody that I refer the bill to the House? Just joking.

We're going to try to take the amendments one at a time.

We're here pursuant to the order of reference of Thursday, December 7, 2006, Bill C-37, an act to amend the law governing financial institutions and to provide for related and consequential matters. We're here for clause-by-clause.

There are no amendments for clauses 1 to 19. Can we move that clauses 1 to 19 be adopted?

(Clauses 1 to 19 inclusive agreed to)

(On clause 20)

[The Vice-Chair, Liberal, Massimo Pacetti]

We have amendment NDP-1 on clause 20. On the left-hand side there is a reference number, so we're going to go by the reference number. So you have reference number 2707464.

We shall discuss one amendment at a time.

Ms. Wasylycia-Leis, would you like to speak to this?

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Thank you, Mr. Chairperson.

I'm pleased to propose this amendment, which is a significant change to the clause on page 8. You will note that it changes the word “Minister” to “Parliament”. So that is basically what I'm moving. I would speak to that, when you're ready for me.

[The Vice-Chair, Liberal, Massimo Pacetti]

Yes, go ahead, please.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

This clause, as you know, is about mergers of a relatively small nature in comparison to the big banks, for any institutions with an equity of less than $8 billion. Some may argue that this is insignificant in terms of Parliament, and I would argue that in fact any time we're dealing with mergers of financial institutions it's important for Parliament to be involved.

We know from all the testimony that banking concerns and access to financial institutions are of major concern to Canadians. We know that there are a growing number of problems around access and around fair treatment, and fundamental to all of this is sufficient competition in the market. So we're recommending that no matter the size, Parliament needs to have some oversight and overview in terms of mergers.

So we are suggesting that this would be an appropriate role for Parliament, and I hope that committee members would find their way clear to supporting me on this.

[The Vice-Chair, Liberal, Massimo Pacetti]

Ms. Ablonczy.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Thank you.

As my colleague mentioned, this clause deals with fairly small institutions. It's small banks, credit unions. These are issues that I don't think need to come before Parliament for a vote. The minister has dealt with them in the past. There haven't been any difficulties. I think this will tie up the time of Parliament unnecessarily. Also, of course, for any significant mergers Parliament would always have to vote on those.

So I really don't think we need this. Also, if we change this clause, it will change a whole web of other rules dealing with small institutions, so there's a huge domino effect by this amendment. I don't really think it's necessary, and it would necessitate us going into a whole web of rules to accommodate it.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you.

(Amendment negatived) [See Minutes of Proceedings]

(Clauses 20 and 21 agreed to)

(On clause 22)

[The Vice-Chair, Liberal, Massimo Pacetti]

Now we're at NDP amendment 1.1. The reference number on the left is 2715025.

Quickly looking at this, I've been advised that the amendment is inadmissible. According to House of Commons Procedure and Practice, “...an amendment is inadmissible if it amends a statute that is not before the committee or a section of the parent act unless it's specifically being amended by a clause of the bill”. In this case, the bill is not amending that clause.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Are you referring to amendment NDP-2?

[The Vice-Chair, Liberal, Massimo Pacetti]

I'm referring to 1.1, which is reference number 2715025.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Yes; sorry.

Could I just make a comment, Mr. Chairperson?

As we know, the bill before us amends a whole variety of acts and is fairly far-reaching in terms of its coverage. We heard yesterday very strong presentations and very comprehensive reports from some of the witnesses around this whole area, and in fact the recommendation for this change came from PIAC and the Canadian Consumer Initiative.

It actually deals with an issue that I think ought to be considered by the committee in this context. You could argue that everything's out of order, basically, on that basis, and I think we would miss an opportunity to do something significant and to make some important changes that we heard about yesterday.

I ask again if you could tell me specifically why this would be out of order and how we could deal with the concern raised yesterday.

[The Vice-Chair, Liberal, Massimo Pacetti]

I'll have the legal counsel speak to that, but I think Mr. Conacher also stated yesterday that some of the amendments he was proposing were not going to be ruled in order, so I think he was ready for any of the amendments that were going to be put forward.

I think we do have a procedure in the House in terms of admissible and inadmissible amendments, but I'm going to have legal counsel speak to that.

[Marc Toupin, Procedural Clerk]

Mr. Chairman, as you've basically just indicated, it's a very simple rule. It's referred to as the “parent act rule”. The proposed amendment would have modified a portion of the statute that is not being amended by Bill C-37. That kind of amendment, according to our rules, is not admissible.

[The Vice-Chair, Liberal, Massimo Pacetti]

Okay.

Go ahead, Mr. McKay.

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

I'm prepared to accept the ruling of the clerk on this, and I tend to agree with him, but I also regrettably agree with Judy that a good portion of the testimony had to do with electronic transfers--you could top this up with a little gin; when I am agreeing with Judy, I need everything I can get--and that the government has not seen fit, for whatever reason, to come forward with a bill that incorporates electronic transfers.

The Canadian Payments Association spoke to it at length on questioning from all members, and I think it is time to come into the 21st century. I would prefer that this committee not let it go--that in fact this committee take some initiative with respect to electronic transfers and within a very short time call the relevant folks together, including the folks from the department, and tell them that this seems to be a huge rip-off on consumers, so we want to deal with it, and deal with it then.

I take it from the vigorous head-nodding from the department that it is their concern as well, and therefore the government's concern and the members' concern. I think we could leave it there in the good faith that we will come back to it sooner rather than later, Mr. Chair.

[The Vice-Chair, Liberal, Massimo Pacetti]

I think we have unanimity around the table except for Ms. Wasylycia-Leis.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

I will accept the ruling as well, obviously. I just wanted to make sure that given the way this bill is worded, and how when you tamper with one piece it affects another piece that may be beyond the scope of this actual bill, and since we are dealing with the issues of approval for the power of collecting, manipulating, and transmitting information, I thought it would only be appropriate that we could amend this bill to create that.

Let's begin the pursuit of that idea of a separate electronic payments framework, which would address some of the concerns.

I will accept the decision, however, I would ask if beyond this five-year review period and the fact that there's an automatic review and then the proposals come forward as a result of a white paper, are there other opportunities for us to reopen the Bank Act or any of the related statutes at any point?

[The Vice-Chair, Liberal, Massimo Pacetti]

That's a fair question.

I'm going to ask that question to finance department officials, because I spoke to them last week as well.

Do you plan to open a study on the electronic transfers? I don't want to put words in your mouth, but can you help us?

[Serge Dupont, Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance]

I indicated, Mr. Chairman, that the Canadian Payments Association indicated they will be undertaking a consultation on this. It is certainly fair to say that from the representations we've heard and seen from many members of the committee, it is something the department itself will become more engaged with. As I indicated last week, we'll also be working on building an electronic transaction code for the various parts of the industry and if, through these various processes, we see that some amendments to legislation would be required, then certainly. There has been a bank review every five years, but it's never precluded other initiatives in the meantime.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you. There is nothing that precludes that further amendments could be made to this bill.

Could we move on?

(Clause 22 agreed to)

(Clauses 23 to 28 inclusive agreed to on division)

(On clause 29)

[The Vice-Chair, Liberal, Massimo Pacetti]

We have an amendment to clause 29. It is amendment G-1, page 2 in the package. Who wants to speak to this?

Ms. Ablonczy.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Thank you, Mr. Chairman.

This amendment affects clause 87, clause 163, and clause 361 as well, so we could group those, Mr. Chairman, if you wish.

The bill makes improvements to the unclaimed balances regime for consumers, to make it more efficient. The bill would now provide that consumers have to receive notice from their financial institution after two years, after five years, and after nine years of inactivity. After the nine-year notice, the funds would be transferred to the Bank of Canada.

The current wording in the bill may seem ambiguous, possibly suggesting that the federally regulated financial institutions need to provide information to the Bank of Canada upon the transfer of the unclaimed funds, even if they don't know the information. That means they'd have to try to find a lot of details about the account, so this technical amendment in those four sections would clarify that deposit-accepting institutions only need to provide the information that is known to them with respect to the unclaimed deposits and instruments transferred to the Bank of Canada. That is what the amendment is about.

[The Vice-Chair, Liberal, Massimo Pacetti]

Mr. McKay.

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

How would a bank not know there had been no activity on an account for two years or nine years or whatever?