Finance Committee on May 4th, 2010

[The Vice-Chair, Liberal, Massimo Pacetti]

Mr. Paillé, it is your turn.

[Daniel Paillé, Bloc, Hochelaga, QC]

Let's talk about the employees, the staff, the workers at a credit co-op who are currently under provincial jurisdiction, a co-op that will call itself a "caisse populaire fédérale", to use my colleague's expression. Will all of the labour law that applies to those employees then come under federal jurisdiction as well?

[Voices]

No, no.

[Daniel Paillé, Bloc, Hochelaga, QC]

You don't seem to be sure.

[Jane Pearse]

It is legislation that relates to the supervision and regulation of the financial institution. Each institution has to follow the laws, the labour laws, in general.

[Daniel Paillé, Bloc, Hochelaga, QC]

In the analysis done by the Minister of Finance before proposing this measure, he failed to take into account the fact that there will undoubtedly be major impacts on labour law, on labour law legislation, on protection of the right to work. For example, concerning language laws in Quebec, if a Desjardins co-op becomes federal, at that point, does the Official Languages Act no longer apply?

[Jane Pearse]

There is now a choice for other types of financial institutions that come under provincial or federal jurisdiction. For example, insurance companies can have...

[Daniel Paillé, Bloc, Hochelaga, QC]

Yes, we're familiar with federal charter and provincial charter.

[Jane Pearse]

That's right. So each insurance company can be taken in as a provincial institution. It is possible for the institution to change system and change jurisdiction, to become a federal institution, for example. This proposal is more or less equivalent to installing a door between the two systems.

[Daniel Paillé, Bloc, Hochelaga, QC]

If I continue with my scenario and the Quebec Desjardins corporation decides to come under this bill, do each of the caisses populaires and all the institutions, centrals and so on, have to initiate a process or is it rather the Mouvement Desjardins as a whole that can come under federal jurisdiction, at a single stroke?

[Jane Pearse]

I don't know. It depends...

[Daniel Paillé, Bloc, Hochelaga, QC]

I will come back to the language question. If that were done, would all employees of Desjardins—and there are a lot of them in Quebec—cease to come under Quebec jurisdiction?

[Jane Pearse]

First, there are...

Every credit union membership would have to make a decision that they wanted to convert from provincial to federal jurisdiction, whether that credit union is in British Columbia, Alberta, or Quebec. It would have to be the membership of the credit union first who would have to decide that they wanted to convert, then there would have to be approval by the provincial government and approval by the federal Office of the Superintendent of Financial Institutions that they were prepared to move into federal jurisdiction.

On the question about whether it would be each caisse populaire, or whether it would be Desjardins, I don't know enough about the legal structure of the Desjardins movement to know which would be the appropriate level that would...where the membership would make that decision. So I don't know the answer to that.

[Daniel Paillé, Bloc, Hochelaga, QC]

You have done estimates, undoubtedly. The Department of Finance is recognized for the excellence of its estimates. Have you produced estimates or models that would tell us how many credit unions, elsewhere than in Quebec, because obviously the request will probably come from somewhere other than Quebec, would come under federal jurisdiction? What would be the banks' reaction then?

[Jane Pearse]

We haven't done estimates of that. Yes, a number of cooperatives are interested in the proposal. They have spent resources to monitor the issue. The Proponent Group covers most of the largest cooperatives throughout Canada. There are 11 or 12 credit unions in the group.

But other, smaller cooperatives, with members across Canada, seem to favour the federal option.

[Daniel Paillé, Bloc, Hochelaga, QC]

Let's talk about the specific activities of the cooperative movement. In Quebec, for example, Desjardins can sell insurance directly to its members, while the banks can't do that. Once this provision is in place, is there not a risk that the banks will be thinking, and I will quote my colleague, in Latin: "what's sauce for the goose is sauce for the gander"?

So the chartered banks could think to themselves that since Desjardins is selling insurance, and that cooperative may be federal, and I am of course saying "may" be, they now also want to sell insurance in Quebec or elsewhere throughout Canada?

[Jane Pearse]

Under this proposal, each institution that becomes a federal institution, under the bill, will only have the powers that exist at the time for banks.

[Daniel Paillé, Bloc, Hochelaga, QC]

So if Desjardins or another cooperative institution that currently sells insurance wants to become federal, it would have to limit its activities and stop selling insurance.

[Jane Pearse]

That's right. The same constraint exists at present in the case of the banks.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you.

We have completed part 17.

We can move on to parts 18 and 19. They deal with the same subject. So we can do them at the same time.

Mr. Regan, you have five minutes.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you, Mr. Chair.

I am pleased to be with you today to discuss this subject.

I am going to wait for the officials to be here.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you to the previous witnesses.

Sorry about that.

If we can get the witnesses for parts 18 and 19, it would be appreciated.

We might as well do parts 18 and 19 together.

Robert, we will try to do parts 18 and 19 at the same time.

Thank you to the witnesses.

Mr. Regan, the floor is yours.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much, Mr. Chairman.

Let me start with part 18, which deals with the Atomic Energy of Canada Limited. I'd like to ask whichever witness is appropriate to answer this.

I guess you don't normally ask the witnesses to introduce themselves and say what they do and so forth. Maybe they'll tell us when they answer the question.

[The Vice-Chair, Liberal, Massimo Pacetti]

They'll be able to answer you during you questioning. There's a lot of bright people at Finance.

[Geoff Regan, Liberal, Halifax West, NS]

I have no doubt of that whatsoever.

And these are the folks from NRCan, who are also very bright, of course.