Evidence of meeting #47 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was banks.
A recording is available from Parliament.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
Did you receive complaints about banking charges following the recent increase in banking charges for certain financial institutions?
Commissioner, Financial Consumer Agency of Canada
I do know that we did get some complaints; however, I do not believe that we received any recently.
NDP
Dan Harris NDP Scarborough Southwest, ON
Merci.
Mr. Sarrazin, to continue with Mr. Mai's earlier points in regard to the approvals, if the legislation goes forward now, of course the final say will go back to the minister with that 30-day period. In the event that something comes forward and the Office of the Superintendent puts forward a negative recommendation, do you not think it would be very troubling if 30 days passed and then the accreditation was made?
Furthermore, if there were serious concerns, might it not be prudent if we were to not have that 30-day period in light of a negative recommendation? Because it might take more than 30 days for a minister and the ministry to ascertain what problems there are and to correct them.
Managing Director, Legislation and Policy Initiatives, Office of the Superintendent of Financial Institutions
I will refer you to the answer that Minister Menzies gave to that question. I think he answered quite adequately. There is a 30-day period; however, the minister can extend it. I think that's the answer that Minister Menzies gave you.
To assume that a period could go on for 30 days and that a file could be forgotten I think is probably not understanding how the process works. The superintendent and the minister talk; I believe they talk weekly. So they have a chance to engage and discuss the files they have in common. I could not imagine a case where a file would be forgotten for 30 days and a deemed approval would be granted.
NDP
Dan Harris NDP Scarborough Southwest, ON
Oh, I wouldn't think that it would be forgotten, but it might take more time, and it would be unfortunate if something were to slide under the radar. I think we would be more comfortable with a little more oversight in light of a negative recommendation. Stability is great, and if the Office of the Superintendent sees no problems, that's one thing, but when problems come to light, we should certainly be more prudent.
I've heard the other side speak of Canada's conservative financial banking system. That's what we mean: it's responsible and strong. It's ironic that in the past the Conservative Party has had perhaps more of a liberal approach to regulation. We're certainly happy that they seem to have come on board with protecting our banks in a stronger way.
NDP
Dan Harris NDP Scarborough Southwest, ON
Very quickly, Mr. Campbell, what financial sense do you think it makes for consumers to have to keep thousands of dollars in a non-interest-bearing account to prevent getting hit with bank fees?
President and Chief Executive Officer, Canadian Bankers Association
On the question of bank fees, if you go to the FCAC's website, you'll get a tremendous resource tool. There's basically a range of accounts for all types of people. You have low-fee accounts and you have no-fee accounts for youth and seniors and so on. There's a range of accounts people can pick and choose from. I encourage people to find the one that works best for them.
Conservative
The Chair Conservative James Rajotte
Thank you.
I'm going to take the next round as the chair.
I did want to address the issue of foreign acquisitions. I wanted to follow up with Mr. Sarrazin.
I just wanted to get a sense of this. Obviously, the provisions are the bank having equity of $2 billion or more and then the value of the foreign entity's consolidated assets exceeding 10% of the value of the financial institution's consolidated assets. The change was made in 2001. Since 2001, how many transactions have actually met these criteria?
Managing Director, Legislation and Policy Initiatives, Office of the Superintendent of Financial Institutions
There was a study conducted for the benefit of the Department of Finance to arrive at the numbers that are before you in the amendment. I don't have the data with me, but it's not a lot. If I recall correctly, it's ten transactions or fewer.
Conservative
The Chair Conservative James Rajotte
Of the two associations, do you have a sense, Mr. Campbell, for instance, in...?
President and Chief Executive Officer, Canadian Bankers Association
Unfortunately, sir, I don't have a sense of that, but on the 10%, I would say that's a very large transaction. Ten percent of an acquiring bank's assets...that's very large.
Conservative
The Chair Conservative James Rajotte
Just for an example for me, would BMO's acquisition of Harris Bank in Chicago meet these criteria?
President and Chief Executive Officer, Canadian Bankers Association
Well, that was back in the 1980s. I would hesitate to give you an answer, but it would be on that scale.
President and Chief Executive Officer, Canadian Bankers Association
It would be on that scale.
Conservative
President, Canadian Life and Health Insurance Association Inc.
The only one that would come to mind would be Manulife's acquisition of John Hancock in the United States—
Conservative
The Chair Conservative James Rajotte
Okay.
Also, I do want to perhaps get a reaction from the two associations, because my point in asking that question is that we are dealing with a very limited number of transactions under these clauses of the legislation. Perhaps the two of you could give the reaction of your associations to these changes.
Mr. Campbell first.
President and Chief Executive Officer, Canadian Bankers Association
Well, when we first read it, I would say.... It strikes us that this is a reversion to the status quo ante: the minister had the authority back in the 1990s. It was delegated to OSFI. OSFI was always involved, and the process under OSFI worked very well, but the world has changed.
The world has changed in the last three or four years. The minister has articulated his interest here, which is that ultimately he has the stewardship role of the stability of the sector and the oversight of the financial framework. I think he sees this as another tool in the tool chest that's there.
I go back to the point that this would be a very large transaction. I would be surprised—even setting this aside—if the bank in question would not consult the minister anyway with regard to a transaction of that sort.
Conservative