Finance Committee on May 11th, 2010

[Denis Lemelin]

In some ways, that would be the view of Canada Post. They say they will compete with them. But at the same time, it's part of the exclusive privilege. Why not keep it in the exclusive privilege and give it to the private sector and compete with them?

That's the irrational part of it. That's our sense of it. It's already part of the exclusive privilege. To maintain the public service to everybody in all the regions of the country, Canada Post needs that exclusive privilege.

[Mike Wallace, Conservative, Burlington, ON]

Okay. Thank you very much.

I don't think we're kidding anybody here; the folks who are here on the environmental issue disagree on a couple of points and don't like it in Bill C-9. I don't think, wherever it is, you would like the changes that are being recommended, whether that's in a separate bill or in Bill C-9 or not. I don't think that's really a secret.

I do take some offence to Monsieur Mulcair's comments about the public servants. To that end, Mr. Yves Leboeuf was here. He's the vice-president of policy development of the Canadian Environmental Assessment Agency, and he was asked by John McCallum:

I wonder if you could give us examples of the types of projects that, through these new measures, might not require any assessment at all, which currently do require assessment.

This is his response:

Sure. First, there is nothing in the proposed amendments that would exclude projects from the requirements of environment assessments that are not already excluded.

And then he goes on to say:

When you look at the package of amendments being proposed here, they essentially cover three things. The first is to make permanent some exclusions that are already in existence and that were introduced by regulations a year ago and make them permanent now. These are exactly the same exclusions that were covered in those regulations a year ago and the same circumstances when public infrastructure projects are to benefit from federal funding under specified programs. Those programs are the same as those that were set out in those regulations last year.

[The Chair, Conservative, James Rajotte]

You have 30 seconds.

[Mike Wallace, Conservative, Burlington, ON]

So you would agree with that, that this is actually what we're doing. We've made the exemptions before, for the stimulus package. All this is doing is making this more permanent. Would you agree with that statement?

[The Chair, Conservative, James Rajotte]

Who are you directing this to?

[Mike Wallace, Conservative, Burlington, ON]

I'll take an answer from any or all of them, because Mr. Mulcair indicated that he didn't trust the answer from the bureaucratic side.

I want to know whether you agree with what the bureaucrat had to say.

[The Chair, Conservative, James Rajotte]

Okay.

We'll start with Mr. Hazell, please.

[Stephen Hazell]

Yes, that's right. What we're doing is making permanent in statute changes that were made last year under a completely flawed process, the same thing we're going through this year that were done by regulations.

[Mike Wallace, Conservative, Burlington, ON]

That's not my question, though. I asked you if—

[The Chair, Conservative, James Rajotte]

Order, order.

[Mike Wallace, Conservative, Burlington, ON]

I think bureaucrats help you design your laws too, my friend.

[The Chair, Conservative, James Rajotte]

Okay.

Mr. Amos, did you want to comment?

[William Amos, Staff Lawyer, Ecojustice Canada]

In brief, I think it's germane to note that those regulations were the subject of litigation. Sierra Club, represented by Ecojustice, was before the Federal Court arguing the vires of those regulations.

[Mike Wallace, Conservative, Burlington, ON]

The bureaucrats said they were making them permanent. There was a suggestion from my colleague from the NDP that they were misleading comments. They were not misleading comments; they were facts.

Thank you, Mr. Chair.

No, Mr. Mulcair, you don't like the answer there.

[The Chair, Conservative, James Rajotte]

Order.

Is there anything further to add to that?

[Arlene Kwasniak]

I would just say one thing. This will certainly reduce the scope of a number of environmental assessments and thereby reduce environmental assessment in Canada by virtue of section 15.1.

Again, as was just suggested, it will render moot the lawsuit of arguing that those exclusion list regulations are ultra vires.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Wallace.

I want to thank all our witnesses for being with us here, for your presentations, your submissions, and your responses to our questions.

Colleagues, I want to point out that we do have a vote today. We also have a vote in the middle of tomorrow's committee. Can I ask you all to speak to your whips? I've asked our whip if we can move the vote to after question period so we don't have our meeting interrupted. If you can do that, I'd appreciate it, for tomorrow. We have one vote today and one vote tomorrow, so if we can get that moved, that would help the chair mightily.

I do want to thank you all for your presentations.

We'll suspend very briefly and then bring the next panel forward.

[The Chair, Conservative, James Rajotte]

I will call the committee to order again.

We have five organizations on our second panel. The organizations before us here for this panel are the Mouvement Desjardins, the Credit Union Central of Canada, the Society of Professional Engineers and Associates, the Organization of CANDU Industries, and Atomic Energy of Canada Limited.

The first witness is Mouvement Desjardins, s'il vous plaît, pour cinq minutes.

[Hubert Thibault, Advisory Vice-President, Corporate Affairs and Desjardins Group Management, Desjardins Group]

Thank you, Mr. Chairman.

Ladies and gentlemen, thank you for your invitation to come and give you our comments on this important legislative measure.

The Mouvement Desjardins hails the initiative that has been tabled before you to permit the recognition and creation of credit unions and caisses populaires under federal jurisdiction. The Mouvement Desjardins understands that it responds—perhaps not completely, which is virtually impossible—to wishes expressed by the credit union system, mainly outside Quebec. Those wishes have been expressed on numerous occasions over the past 15, 20, if not even 30 years. In that sense, the Mouvement Desjardins hails the initiative that is before you today.

Having said that, the Mouvement Desjardins must also say that it is extremely comfortable with the legal framework to which it is currently subject, that is to say the Quebec legislation governing it. We think two aspects in particular are conducive to the success of the Mouvement Desjardins. As a result of them, we are tempted to suggest further improvements to the act before you for the future. They also explain the fact that the Mouvement Desjardins would not be able to use the provisions that Bill C-9 will include in the Bank Act.

First of all, the Mouvement Desjardins is an integrated system of caisses populaires. The possibility of establishing a federation—a league, to use the English term—and pooling powers as well as responsibility for the network is fundamentally important for us. We get the impression that, in a second component of the House of Commons' initiative, that would be something you could consider with interest to permit greater cooperation among the credit unions of Canada, indeed cooperation within the credit unions and the Mouvement Desjardins within Canada.

There is another very distinctive feature of the Quebec legislation. In Quebec, as in many European countries, the constituted general reserve cannot be shared. In the bill before you today, the membership shares have no par value. Consequently, a transfer or migration from a Desjardins caisse populaire under federal jurisdiction would be unimaginable since the share's par value, which has been $5 since the first caisse was founded in December 1900, would overnight become several tens of thousands of dollars. In fact, it would have a value pro-rated to the market value of the entire Desjardins group. So are these are two factors that are very different for us.

When we look at the needs of the Mouvement Desjardins in terms of operations, both in Quebec and the rest of Canada, there is an aspect that is fundamentally important for us, and that is the ability to follow our corporate members who have commercial operations across Canada. The Mouvement Desjardins has been examining this question for a number of years. There is one vehicle which we think is suited to enabling us to render these services to our members, and that is a traditional bank as you know it under the Bank Act.

That said, in the cooperative world in Quebec, as in many other places, the term “bank” has a connotation for our members, in our caisses, which is somewhat shaded by our everyday competitive experience. In fact, if the Mouvement Desjardins had one request to make to the committee or to the federal government in connection with Bill C-9, it would be, if a bank is held solely by caisses populaires or cooperative entities or a mix of caisses populaires and credit unions, that they be able to use the name of federal credit cooperative so that it reflects their cooperative nature.

Thus, a simple amendment could enable the Mouvement Desjardins to better discharge its obligations and better serve its cooperative members.

Thank you, Mr. Chairman. That's what we wanted to bring to your attention.

[The Chair, Conservative, James Rajotte]

All right. Thank you for your presentation.

Next we will go to Mr. Phillips with Credit Union Central of Canada.

[David Phillips, President and Chief Executive Officer, Credit Union Central of Canada]

Thank you, Mr. Chair.

Ladies and gentlemen of the committee, thank you for the opportunity to speak to you today on part 17 of Bill C-9, the Jobs and Economic Growth Act, which proposes, among other things, to amend the Bank Act in order to allow for the establishment of federal credit unions.

My name is David Phillips and I'm president and CEO of Credit Union Central of Canada. Presenting with me today on behalf of the Case for Progress group of credit unions is Tracy Redies, president and CEO of Coast Capital Savings.

In 2009, Canadian Central called upon the federal government to establish a federal charter option for credit unions. We believe that a useful, attractive, accessible and distinctive federal charter would achieve several objectives.

First and foremost, a federal charter would enable those credit unions that wish to do so to reach beyond provincial boundaries and pursue business strategies that are not constrained by provincial regulation. Expanding across provincial borders has become more pressing as the growth and consolidation of the credit union system is approaching the point where the lack of a federal charter option may become a competitive disadvantage for some credit unions and for the credit union sector as a whole.

Credit Union Central of Canada has expressed a preference for establishing federal credit unions under the federal government's existing cooperative financial institutions legislation. However, Canadian Central did not preclude alternative legislative approaches if such legislation could provide a federal charter option for credit unions that meet these conditions.

The federal government has chosen to provide for the establishment of federal credit unions through the Bank Act, and Credit Union Central of Canada supports the enactment of part 17 of Bill C-9 as a good first step towards the establishment of a useful, attractive, accessible, and distinctive federal charter option for credit unions.

While it has many positive features, the placement of the federal credit union charter in the Bank Act does raise some issues of compatibility between the framework proposed for federal credit unions and a number of provisions in the Bank Act that are primarily designed for commercial banks.

The federal credit union legislation, while welcome, is lengthy and complex. For this reason, Canadian Central is still analyzing the proposed amendments. We expect that some issues will result from this analysis that Canadian Central will want to discuss with the Department of Finance at some point in time. These issues include matters such as the granting to members of a federal credit union access to the membership list of that credit union--Ms. Redies will speak to that in just a minute--and the position of the federal credit union in the payments clearing and settlement system.

Canadian Central, nevertheless, wishes to express its support for the enactment of the legislation in Bill C-9 that will provide existing credit unions and those desiring to establish new credit unions with the option to operate under a federal charter. We believe that the proposed legislative framework is a positive step forward in achieving this purpose.

Thank you very much for the opportunity to address you today.

Ms. Redies will now say a few words about the proposed framework.

[The Chair, Conservative, James Rajotte]

You have about a minute and a half, Ms. Redies.

[Tracy Redies, President and Chief Executive Officer, Coast Capital Savings Credit Union, Credit Union Central of Canada]

Thank you, David.

Mr. Chair, ladies and gentlemen of the committee, thank you for the opportunity to speak to you today on behalf of the Case for Progress committee. I'm pleased to have the opportunity to offer comments to the members of the House of Commons finance committee regarding part 17 of Bill C-9, which proposes to amend the Bank Act to allow for the establishment of federal credit unions.

Formed in 2006, the Case for Progress committee has been a strong advocate for federal legislation to enable credit unions to expand beyond their provincial boundaries. The committee is comprised of large credit unions interested in developing a national presence, mid-sized credit unions focused on becoming regional financial services providers, and small affinity-based credit unions wanting to serve members of their communities wherever they are located in Canada.

Coast Capital Savings is one of the founding and largest members on the Case for Progress committee, but the diversity of the committee underscores how the option of becoming a federal credit union could appeal to any credit union in the system. The Case for Progress committee applauds the government's decision to allow for the creation of federal credit unions through amendments to the Bank Act, as outlined in Bill C-9. The proposed legislation is a historic milestone that will enhance the strength and stability of the credit union sector and financial services industry as a whole.

The proposed legislation recognizes the hallmarks of a credit union and provides an attractive option for those credit unions interested in expanding outside their province of origin under one national regulatory authority. It will give credit unions the chance to develop greater economies of scale and more competitive cost bases while remaining true to cooperative principles. This, in turn, will allow the development of a wider range of enhanced products and services that credit union members now expect.

Increased competition from federal credit unions will provide Canadian consumers more choice, drive innovation, and lower prices. The charitable sector will also benefit, as credit unions have a proud history of significant involvement and philanthropic investment in the communities where they operate.

While the Case for Progress committee supports the federal credit union charter, we have a concern with regard to a provision dealing with access to membership lists.

[The Chair, Conservative, James Rajotte]

Be very brief, Ms. Redies.

[Tracy Redies]

For a credit union, the membership list is also the credit union's customer list. The provision in Bill C-9 dealing with membership lists could therefore provide a competitor of a federal credit union with the means of obtaining access to a list of all the credit union's customers. This could be a major impediment to take-up of the federal credit union option.

Fortunately, there is a simple solution, namely to change the rules to correspond to the rules for federal insurance companies, whereby par policyholders and shareholders are not permitted to obtain the list of par policyholders. This is appropriate for policy reasons and also to prevent a competitor from buying shares and using the entitlement to obtain a full list of par policyholders.