Finance Committee on June 20th, 2011

[The Chair, Conservative, James Rajotte]

Okay. Thank you.

We will table clauses 2 to 8 for now.

(Clauses 2 to 8 inclusive allowed to stand)

(Clauses 9 to 19 inclusive agreed to)

I think there are questions or points that people want to make on part 7. Part 7 obviously deals with the issue we discussed this morning, and that deals with clauses 20 to 26.

Ms. Nash, do you want officials brought to the table?

[Peggy Nash, NDP, Parkdale—High Park, ON]

I don't know if that's necessary.

My concern, Mr. Chair, is that these clauses form just about half of the entire bill. This part is 20 pages long. Someone described it earlier as a bill within a bill. We have been advised that mainly because of the pension income benefits it's important to rush this bill so that seniors can get their cheques, but I fail to see what the rush is with this substantive change when we have not fully examined it. I'm very uncomfortable about rushing through this part of the bill.

I have not heard from the witnesses how increasing private mortgage insurance is in the public interest. I think there are implications for public liability, given that the public liability is increasing from $200 billion to $300 billion. That's big. That's massive. I think Canadians would want to fully understand what this means, especially given the disastrous bailouts of mortgage insurers south of the border. Canada has fared so much better because of prudent management and regulation, but we don't want to rush through changes that could dramatically increase the liability of Canadians.

I would urge that this part of the bill be hived off to allow us further time to examine it. Perhaps it could be included in the implementation bill that will come up in the fall. That would be a more prudent approach to something that is a significant change.

That would be my recommendation, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Nash.

I have Mr. McCallum, Mr. Hoback, and then Mr. Jean.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Chair, I have a question from somewhat of a different angle. It seems to me there's an asymmetry in this bill, which is a bit strange, especially coming from a Conservative government, because it seems to, in some sense, favour the government sector over the private sector.

My understanding is that the CMHC cap is now $600 billion, but it was $350 billion back in 2008. That's not a legislated cap. It can change, I guess, by order in council or through some other mechanism. The cap on the private sector is $300 billion, which now would constitute one-third of the market, and that's legislated.

If you want to legislate a cap for the private sector, why not legislate a cap for CMHC as well? Why is there this difference in treatment?

[The Chair, Conservative, James Rajotte]

Thank you, Mr. McCallum.

We'll go to Mr. Hoback now.

[Randy Hoback, Conservative, Prince Albert, SK]

I'm looking at what Ms. Nash said. We did have witnesses in front of us from different sectors who talked about this piece and what actually is going on. They all said basically the same thing, that this is more or less a process change from two private contracts to a process that is now in legislation.

Ms. Kinsley from the CMHC said they were not expecting any more competition, that they were not expecting any more changes in their operation or the operation of the private sector companies. All that was happening was the process was being identified in legislation instead of special contract. I'm not sure how much more study we'd actually require on this. I don't think we need any more.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. Jean.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

On that point, my question was whether the increase from $200 billion to $300 billion would increase the percentage risk to taxpayers at all, and the answer from Ms. Kinsley was clearly no, it would not. I don't understand what Ms. Nash is suggesting because the evidence today has indicated that it will not increase the risk to Canadian taxpayers at all. It's the same percentage risk as they currently hold.

[The Chair, Conservative, James Rajotte]

Are there any further questions?

Mr. McCallum has a question on the table.

Mrs. Glover.

[Shelly Glover, Conservative, Saint Boniface, MB]

I'm glad to see the officials are here. I just want to correct the record.

I may be wrong, but are we going from $200 billion to $300 billion? I thought it was $250 billion to $300 billion.

[Jane Pearse, Director, Financial Institutions Division, Department of Finance]

Your number is right.

[Shelly Glover, Conservative, Saint Boniface, MB]

So it's $250 billion to $300 billion. Thank you.

[The Chair, Conservative, James Rajotte]

Do the officials or anyone on the government side wish to address Mr. McCallum's question?

[Jane Pearse]

I'm sorry, could you repeat the question?

[John McCallum, Liberal, Markham—Unionville, ON]

Yes.

There seems to be a difference in treatment, the rationale for which I don't know, and that is because you have a legislated cap for the private sector and a lesser cap through other means than legislation for the CMHC.

My question is why this difference in treatment.

[Ling Wang, Executive Advisor, Financial Sector Policy Branch, Department of Finance]

The CMHC cap is also legislated. The limit is legislated in the National Housing Act. It has the same mechanism as the proposed bills for increasing the limit through a future appropriation act.

[John McCallum, Liberal, Markham—Unionville, ON]

So the CMHC cap is in legislation at $600 billion?

[Ling Wang]

It's legislated, yes. The latest $600 billion is in the 2008-2009 Appropriation Act.

[John McCallum, Liberal, Markham—Unionville, ON]

Okay. So then my premise is wrong. They are both legislated. Is that your answer?

[Ling Wang]

That's correct.

[John McCallum, Liberal, Markham—Unionville, ON]

Okay.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. Marston, please.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Just to go a little bit further on that, if it's legislated, then could an order in council increase that cap?

[Ling Wang]

In order to increase the cap, both for CMHC and for the private mortgage insurers under the proposed bill, an appropriation act is necessary.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

So it would have to be brought to the House?