Finance Committee on March 8th, 2012

[Terry Campbell]

Oh, yes.

[Scott Brison, Liberal, Kings—Hants, NS]

I should go further in terms of.... Are you confident that in fact the opinions being expressed by Bank of Canada Governor Carney on the Volcker rule are going to have the desired effect, in that the FCAC and others will pull back from this?

[Terry Campbell]

I hope so.

Governor Carney is in very good company. It isn't just Governor Carney, of course. It's the minister, Mr. Flaherty. It's Superintendent Dickson.

Their counterparts around the world—in the United Kingdom it's the Chancellor of the Exchequer, it's Commissioner Barnier in Europe, and authorities in Japan—have all said the same thing.

I used the phrase “preponderance of opinion”. Our hope is that the preponderance of opinion will weigh upon the authorities in the United States. Quite frankly, when we read Chairman Bernanke's comments last week, we saw that he said, in effect, “Look, we get it already”.

We're going to have to go back, I hope, to the drawing board. But at least we're going to have to go back and take seriously those comments.

They're not going to meet their July deadline. That's good news, because they're going to have to rethink those....

Thank you for that question. It's a very important one.

[The Chair, Conservative, James Rajotte]

You have ten seconds.

[Scott Brison, Liberal, Kings—Hants, NS]

That's fine, Mr. Chair. Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Brison.

We'll go to Mr. Hoback, please.

[Randy Hoback, Conservative, Prince Albert, SK]

Well, Chair, I'll take that ten seconds if he wants to give it up.

Ladies and gentlemen, it's great to have you here this afternoon, and it's great to listen to you. As we look at Bill S-5, it's a technical bill by nature, so it's something that I don't think the government could move forward on or see progress on without your cooperation and involvement.

I know that Mr. Julian's first question to the minister was on the process, so perhaps I'll cross all the bases and ask you, first, were you consulted? What was that system like? What was the process like?

Mr. Campbell, I'll start with you and then go across the group. How did you find the process we used to consult with you to get the changes you're asking for?

[Terry Campbell]

I'll be very quick and say yes, we were consulted; yes, we had a very full opportunity to make our thoughts known; yes, we put our commentary in writing; and where we had questions or follow-up, we pursued those questions with the Department of Finance.

We feel we've had a good opportunity for input.

[Frank Swedlove]

From our perspective, we thought it was an excellent process. There was plenty of opportunity for dialogue.

Because it is technical in nature, often there needs to be a fair amount of back and forth to get a full understanding of what the issues are or where there are difficulties. In my notes, I referred a number of times to the fact there were some efficiency gains that could be made, but you have to explain what the issues are before the officials can understand what are the difficulties. We had the opportunity to express that.

Obviously you don't get all you want in these discussions, but we feel that the majority of our issues were dealt with. We were very pleased at the process.

[Ursula Menke]

As an agency affected by the legislation rather directly, we were consulted.

[Randy Hoback, Conservative, Prince Albert, SK]

That's an easy answer, right?

[Philipe Sarrazin]

I can echo Madam Menke's comment. We were consulted. We have a privileged relationship with the Department of Finance. Obviously we work closely with them on an ongoing basis. They are aware of our opinions on legislative matters. We have shared them.

So we found the process to be effective.

[Randy Hoback, Conservative, Prince Albert, SK]

That's great.

So that confirms that there was a process in place. I think that's what Canadians want to hear, that it wasn't just something government was doing heavy-handedly; it had the cooperation of a variety of partners, in this case, to see this type of legislation come forward. That should give comfort to the opposition members, that there was a good process followed in terms of recommendations.

As you said, Frank, it might not be everything you want, but at least you were consulted and talked to.

Terry, one of the things we're seeing in this bill--and I'll read it in terms of today's legislation--is that the government is increasing the “large bank” ownership threshold.

Can you explain why this is occurring, and what impact the increased ownership thresholds will have on oversight of financial institutions?

[Terry Campbell]

This was a government initiative. This did not originate with the industry. As we looked at it, though, it struck us that the rationale was fairly clear. In the ownership structure of Canadian banks, you have three tiers. You have the very, very large banks that have to be widely held, you have the middle tier of banks that can be more closely held, and then you have smaller banks.

Over time, two things have happened. There has been the normal growth in the marketplace. The second thing is that the regulatory community has required considerably.... We were already pretty well capitalized, but it's required considerably more capital to be injected in the banks, and those just naturally raise the limits.

My understanding, although this originated with the government and not with us, is that it's just an effort to keep the limits in sync with the normal growth in the marketplace.

[Randy Hoback, Conservative, Prince Albert, SK]

Okay.

Frank, one of the things our government has been working very hard on, of course, is to try to get back to a balanced budget, and we're looking at places where we can reduce red tape. I understand your association has been fairly supportive of changes because of that, looking at ways we can reduce that administrative burden, and offering adjustable policies for foreign jurisdictions.

Can you explain how we're eliminating some of the red tape in this legislation and how it impacts you?

[Frank Swedlove]

You gave the example of adjustable policies. These are policies where some of the conditions can change over time. That's how the nature of the policy is structured.

In foreign jurisdictions, there are already disclosure requirements with respect to that. In the former approach of the government, there were disclosure requirements that were “Canadian-based”, if I can use that expression, that applied to those foreign customers, so they were getting two kinds of disclosure. Those were confusing for our foreign customers, who make up almost half of our customer base. With this new legislation, that will be changed.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Hoback.

We'll go to Monsieur Mai.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Thank you, Mr. Chair. I will ask a few questions, and then I will give the rest of my time to Mr. Harris.

To conclude, Mr. Sarrazin, tell us how long it generally takes for a normal review process for an acquisition file.

[Philipe Sarrazin]

I have no idea. I am sorry.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

You have no idea?

[Philipe Sarrazin]

I don't participate in that process, but I can find that information.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

You really have no idea? In that case, I will not go any further.

Ms. Menke, in 2010, I believe, you started to examine what happens with credit cards. Have you received complaints from consumers?

[Ursula Menke]

Yes, we receive complaints.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Have you received complaints about credit card fees and bank fees, especially recently, following the increase in bank fees?

[Ursula Menke]

We started looking at credit cards well before 2010. We began looking into the matter when the agency was established in 2001.

You are asking me whether or not consumers are complaining. Recently, there have not been as many complaints. There were quite a few in 2008 and 2009, when interest rates had dropped significantly but the credit card rates had remained at the same level. We received many complaints then. Right now we are not receiving any more complaints than usual.

However, more recently, in 2010, there was the issue of the credit card and the debit card which was being promoted, if you like. This was essentially an issue between the suppliers of credit cards and the merchants. We did receive some complaints about these—