Evidence of meeting #15 for Finance in the 40th Parliament, 3rd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was part.
A recording is available from Parliament.
Bloc
Director, Financial Institutions Division, Department of Finance
Yes, that's right, thank you.
The big credit unions are looking for a way to become more competitive across Canada and to offer services to their bigger clients that are currently doing business across Canada.
So right now, if you're a large credit union, especially in B.C, Alberta, the Atlantic provinces, and Quebec, some of them feel that they are being constrained by their provincial system, and that if they had the opportunity to go across Canada, they could be very successful doing that.
Liberal
Bloc
Daniel Paillé Bloc Hochelaga, QC
I have some questions to ask about the concept that you can be a shareholder in a co-op. That seems to be contradictory from the outset.
Clause 1931 of Bill C-9 talks about the right to issue shares. It also says there is no right to vote. But a little later, it says that there is a right to "receive any of the remaining property". In a co-op you invest five dollars, and the Mouvement Desjardins, for example, has had exceptional growth through its own capital.
Is that not a major contradiction? I'm a little surprised to hear you say that consultations were held and the Mouvement Desjardins, for example, is in complete agreement. It seems to me that this is subject to interpretation. It would mean that if Desjardins decided to do that, it would have to have its own federal name, that is understood. But there is a kind of dichotomy. A cooperative with shares: that seems completely contradictory to me. I would like to know more about the idea behind all that.
Director, Financial Institutions Division, Department of Finance
I'm sorry; I'm not sure I understand which clause you're referring to.
Bloc
Daniel Paillé Bloc Hochelaga, QC
For example, you have clause 1931, which is quite long. There are also others farther on. That being said, without going clause by clause, let's stick with the basic principle. Alphonse Desjardins invented financial cooperatives, in Canada and particularly in Quebec. The principle was that they would not be companies with share capital, and so there is no remaining property that can happen in the event of bankruptcy, there is no division among the shareholders, and you get only your own capital back.
So inventing a system of "Inc." cooperatives runs counter to financial logic. I am wondering whether this simple thing doesn't mean that we turning the cooperative system into something else, that to all intents and purposes this allows individuals, and even corporations, to take control of cooperatives, of small cooperatives. In other words, it risks turning the cooperative system, which it has to be said is working very well in Canada, into something else, and turning it into institutions like the chartered banks.
Director, Financial Institutions Division, Department of Finance
I would like to reply to one part of the question, and then I will ask my colleague to reply to the rest.
First, I want to correct one of my comments. It isn't the cooperative system in general that is perfectly in support of every part of this bill.
Director, Financial Institutions Division, Department of Finance
Certainly there are stakeholders who want changes, a difference in the model, for example. But still, as a general rule, we have had very good response to this bill. That was on the first part.
On the second question, I think Will can answer.
Will Kendall Economist, Strategic Planning and Trade, Financial Sector Policy Branch, Department of Finance
Sure. I can probably talk a little bit about the shareholding element. And I apologize for not speaking French.
To address one of your concerns--that credit unions could use shareholdings to take over other credit unions and kind of get around the membership ownership of credit unions--I guess I would say that the bill ensures that credit unions are still owned and controlled by their members. The ability, or the flexibility, I guess I would say, to issue shares allows them to pursue greater avenues of raising funds, but at the end of the day, the members still own and control it. The shareholders have very limited rights compared to the members.
Liberal
The Vice-Chair Liberal Massimo Pacetti
Thank you.
No, the time has expired, Mr. Paillé.
Mr. Mulcair, you have the floor.
Bloc
NDP
Thomas Mulcair NDP Outremont, QC
Thank you, Mr. Chair.
I have a comment concerning the terminology—the answers are well covered.
All of the provinces have legislation governing this type of institution. In several provinces' credit union statutes, they use the French title "Loi sur les caisses populaires". I would offer the example of Manitoba, but the same is true in several other provinces, since it's the same translators using the same sources. Of course "caisse populaire" is not a registered trade-mark of the Mouvement Desjardins, it is used as a generic term for "credit union". In the English version, they say the Credit Union Act.
Now, I see that the federal terminology is different. It also provides for the possibility of a provincial institution, with your system of double access, with permission and agreement. That being said, what will be done if there is a credit union in Manitoba that calls itself a "caisse populaire"? Will we not end up with the term "caisse populaire" at the federal level.
Mr. Kendall is indicating yes. Don't hesitate to answer, Mr. Kendall.
Economist, Strategic Planning and Trade, Financial Sector Policy Branch, Department of Finance
Well, as Jane said, the provisions of this part of the Budget Implementation Act don't preclude certain names, except that if you are going to be a federal credit union and you want to use the term “credit union”, you would also have to use the term “fédérale”.
NDP
Thomas Mulcair NDP Outremont, QC
So, if it is a Manitoba establishment, to take an example I am very familiar with, because I was there when those statutes were translated, we might end up with a "caisse populaire fédérale" in Manitoba. Is that correct?
Director, Financial Institutions Division, Department of Finance
If there is a credit union that...
Director, Financial Institutions Division, Department of Finance
...that follows the regulations under Bill C-9, that is registered as a federal institution, then certainly that financial institution might have activities in Manitoba, for example.
NDP
Thomas Mulcair NDP Outremont, QC
It's a question of terminology. Some people might be surprised to learn that when this chapter is enacted, we are creating establishments that will be calling themselves "caisses populaires fédérales".
NDP
Thomas Mulcair NDP Outremont, QC
Okay. That's all, but "what's sauce for the goose is sauce for the gander", as a great philosopher from the Outaouais once said, Mr. Chair. I am certain that Quebec can easily enact legislation that would say that from now on our caisses populaires will call themselves banks.
