Good day. Thank you for inviting me here.
The Canadian Association of Mutual Insurance Companies represents 91 companies. They are property and casualty insurance companies, and they are also mutuals. They're mutuals in the sense that instead of being stock companies, they're owned by their policyholders. The policyholders decide the direction of the companies. They also get refunds at the end of the year if there is a surplus being generated by the company. They also direct their companies to make contributions to the communities they live in.
The total number of companies that we have generated $4.6 billion of sales last year, which is 11% of the Canadian market. The Canadian market is mostly foreign-owned. We represent 25% of the Canadian-owned Canadian market.
We have four issues that we'd like to bring to the table. First of all, the economic stimulus program is scheduled to be terminated by March 31 of next year. We would like that to be continued for sewer systems and roads and bridges.
There is also the 2012 review of the financial services legislation. In this review we would like to maintain the ban on banks selling insurance in their branches.
We would also like to see the government exercise more control over the level and types of fees charged by Schedule I banks.
And we would like the government to address the significant difference there is in the retirement benefits afforded to public sector employees as opposed to private sector employees.
Concerning the first item, sewer backup-related claims have increased significantly over the last 15 years. We went from an average of $5,000 per claim to $55,000 per claim. Because of that significant increase, claims related to water damage are now the number one type of claim we have in P and C insurance companies. The water damage related to sewer backups is partly due to the sewer system, which is deficient in Canada. The federal government has put $4 billion into the sewer system over the last couple of years. This has been added to the money spent by provincial as well as municipal governments. The total amount spent was about $12 billion. This is much less than what is needed, which is about $125 billion because of the deficit we have created in the sewer system.
The Bank Act will be reviewed in 2012. We have created in Canada a banking system made to be an oligopoly. We created it back in the 1960s, 1970s, and 1980s, when we protected our banking sector from foreign competition. Because of that, we now have a banking system that is very strong and can put in place basically whatever fees they want to see in place.
They got into the insurance business a few years ago and they would now like to sell insurance inside their branches. We're saying that if they were to be allowed to sell insurance inside their branches, they would have an advantage over the P and C insurance companies, one we don't have. What they want to do is get the client and explain to the client that they cannot only have a loan, but that the bank can also sell them insurance inside the branch. They want to be able to use the personal information they have on their clients to target their marketing of insurance products. And they want to be able to sell insurance on their banking websites. These are the types of advantages they want to maintain and to have in the future.
Moreover, the banks have recently introduced fees for receiving electronic transfers. These banking fees amount to $25 per company, for a total of $300 a year, which is an important revenue stream for the banks but a major expense for small businesses. They now have to pay fees in order to receive payment transfers, which used to be done at no cost.
We would like to see the federal government set limits: not only do we need to ensure that banks are solvent, but we also need to control fees, the type and level of fees, that banks can impose.
Finally, the current public sector pension plan is much more generous than what one finds in the private sector, generally speaking. It is something that we would like the government to look at. Thank you.