Good afternoon. My name is Terry Campbell. Accompanying me today is my colleague, Darren Hannah, Acting Vice-President of Banking Operations.
We wish to thank the chair and members of the committee for providing us the opportunity to present our point of view.
As you know, the Canadian Bankers Association works on behalf of 50 domestic banks, foreign bank subsidiaries, and foreign bank branches operating in Canada, and on behalf of their 263,000 employees across the country. We're proud of our member banks for their continued strength and stability at a time when many banks around the world have required massive taxpayer bailouts to continue operating—and, quite frankly, while others just no longer exist. By contrast, our banks are well managed, well regulated, and well capitalized and have not been a burden to taxpayers. In fact, they are continuing to provide financing to consumers and businesses throughout this tough economic period. This is an advantage for Canada as we begin our economic recovery.
In addition to sound management at our banks, Canada's regulatory system is robust. There are clear benefits to consolidated regulation, and we believe these benefits would be further enhanced if Canada were to move to a single securities regulator. While Canadians are able to have confidence in the regulation of the banking sector, securities regulation is one area where further work is needed. So we congratulate the government for its initiative to move quickly to a single securities regulator.
As I mentioned, despite tough economic times and global financial turmoil, Canadian banks have continued to make credit available to creditworthy businesses across the country. Lending to businesses has grown at a pace in line with business demand. A year ago, just as the financial markets were the most fragile, Canadian bank lending to businesses accelerated as other sources of financing contracted. Despite the fact that banks stepped in to provide some of the shortfall that emerged in the business financing market, they were not able to fill the credit gap completely. The federal government recognized this in budget 2009 with the introduction of the business credit availability program—BCAP, as it is known—which provides at least $5 billion for additional lending to firms through Export Development Canada and the Business Development Bank of Canada, and in cooperation with private sector lenders. Banks are actively working with these programs in an extra effort to find credit solutions for creditworthy business clients during this challenging economic time.
As the economy gradually regains strength, the need for extraordinary government financing programs should abate and the balance between banks and other lenders in the overall financing market should return to more traditional levels.
In the wake of the global recession, Canada has been faced with major challenges on the domestic front. However, Canada has a number of advantages that will hasten its economic recovery, including a sound fiscal base and an ongoing strategy to achieve international tax competitiveness. This fiscal policy direction has served Canadians well by providing fiscal stimulus in the short term while helping to put the economy on a strong foundation for sustainable growth.
The CBA believes that the government should stay the course on its taxation program, and we believe there are revenue-neutral tax measures that can be undertaken to further enhance Canada's tax competitiveness. As outlined in our submission, these revenue-neutral tax measures include continuing to implement the recommendations of the report of the Advisory Panel on Canada's System of International Taxation and amending tax legislation to allow for consolidated tax reporting by Canadian companies.
We'll be very pleased to answer your questions and to elaborate on some of these points.