Finance Committee on March 13th, 2012

[Jean-François Vinet]

Not on this matter. We are very active in Quebec because the Consumer Protection Act is currently being reviewed. We have been very involved in Quebec on this issue, but less so at the federal level.

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

Thank you, Mr. Vinet.

I would now like to give the floor to Mr. Thibeault.

[The Chair, Conservative, James Rajotte]

You have one minute, Mr. Thibeault.

[Glenn Thibeault, NDP, Sudbury, ON]

Thank you very much, Mr. Chair.

Following up on what my colleague Ms. Glover talked about, maybe Mr. Melville can talk to the committee about which banks had the most complaints in 2008, when RBC left, and in 2011, when TD left. Be very brief, please.

[Douglas Melville]

In 2008, when RBC left, they were the largest source of our banking complaints. In 2011, when TD left, they were, in turn, the largest source of our banking complaints.

[Glenn Thibeault, NDP, Sudbury, ON]

Thank you for that clarification.

Can you also please explain some of the broader public policy benefits that come from having a single mandatory dispute resolution system? What are some of those public benefits?

[Douglas Melville]

I'll be as quick as I can be.

It's the articulation of the complaint, which is not something a firm-focused provider will be interested in doing. It's the ability to do the investigation, not simply accept the paper file submitted by the firm to the dispute resolver. It's the ability to have someone who is actually motivated to do what is fair and independent and impartial between both parties, without being potentially conflicted by where the rent cheque and the payroll are going to come from next.

Finally, I think it's to be a source of that information and intelligence for the government itself, for regulators, to guide good public policy for the future. It's better to prevent problems than fix them.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Thibeault.

I'm going to go to Mr. Van Kesteren. Before I do, colleagues, I'm going to recommend that we actually continue past 5:30 with the colleagues and witnesses who are able to stay. We only need three full members, including the chair, to sit. We need one member of the opposition. Opposition members, I understand, may have to leave, but I want to give every member of the committee an opportunity.

We don't have any motions before the committee, and if witnesses are able to stay, I'm recommending that they stay. It's 5:30.

Ms. McLeod.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

There is no opportunity for anything to come to the table for—

[The Chair, Conservative, James Rajotte]

There are no motions coming before the committee today.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Even related to current—

[The Chair, Conservative, James Rajotte]

I just need one government member and one opposition member to continue. Is that okay? Is there one member of government who can stay?

[Shelly Glover, Conservative, Saint Boniface, MB]

Yes.

[The Chair, Conservative, James Rajotte]

Thank you. I'll go to Mr. Van Kesteren, please.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Thank you, Mr. Chair.

Thank you all for appearing here this afternoon.

Mr. Melville, just for the record, on the last question, the two banks you mentioned, TD and the Royal Bank, are the largest banks, so that stands to reason, in the case of the numbers. That's just for the record.

Would you agree with that statement?

[Douglas Melville]

I would agree that when they left each was, in turn, the largest participating firm in our service, yes.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

I'm not making excuses for that, but I think it's just important we have that for the record. Thank you.

Mr. Phillips, I'm going to ask you a few questions. I understand that your organization is very supportive of the changes contained in this legislation that would, in fact, impact the federal credit unions. When your organization appeared before the Senate banking, trade and commerce committee, you were especially positive about the changes that will permit federal credit unions to vote with the cooperatives class on the governance of the Canadian Payments Association.

For the benefit of the House, for this committee, I'd like to quote what your representative said: First, we want to note our support for the proposed amendments to sections 9(3)(a) and (b) of the Canadian Payments Act. Placing the federal credit union in the cooperatives class will preserve and strengthen the credit union system representation at the CPA. It will ensure that a federal credit union will be represented by a director, who speaks for the interests of cooperative financial institutions in CPA matters. A strong advocate at the CPA is important for the credit union system's ability to advocate on behalf of credit unions and to continue to operate payments facility efficiently and cost effectively, which has a direct impact on overall credit union system competitiveness.

Would you elaborate further on how this measure will benefit credit unions?

[David Phillips]

Well, the legislation when it was initially passed would have thrown the federal credit union into the same voting class as the commercial banks in voting for their directors on the CPA.

It's a somewhat technical point, but it meant that, because of the way the voting was conducted, it was not really possible for a federal credit union to ever be elected as a director of the Canadian Payments Association because they would have been outvoted in this class, which would have been dominated by the commercial banks, and they would have been represented on the CPA, in effect, by a commercial bank.

There is a cooperatives class already in the CPA structure, and so what we said to the government was that we think it makes more sense to put this federal credit union into the cooperatives class because it has more in common with a cooperative than it does with a commercial bank. The federal government agreed with us on that point, and so it agreed to make the change, which it is making in this legislation. We are supportive of that change. We think it makes more sense to put the federal credit union in with the other cooperatives, so that it's grouped with like interests. That will work more effectively for federal credit unions when they are formed.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

You and I have met. We've talked about the importance of credit unions. You certainly do fill a void that has been abandoned, I think, by banks. I want to understand, and I think the committee needs to know, too, that this legislation is moving in the right direction, and will help to make sure that we still have credit unions in the future.

Do you feel that is the case? Is there something you feel is lacking in this legislation? Is there something you want to specifically zero in on as to what's really important?

[David Phillips]

We think the reclassification under the Canadian Payments Act is a good thing. The extra powers that credit union centrals might have to market some of their technology services to other, smaller financial institutions is a good thing, and that's in this bill.

We think it's a missed opportunity on Bank Act security. We think what really should be done there is to do to away with Bank Act security, but that's a discussion that finance has undertaken to have.

We're not troubled by this being a technical bill. The government has proven it's prepared to come back within a five-year horizon to make important changes that are necessary. The legislation we do like was passed in 2010, when 117 pages were added to the Bank Act to provide for federal credit union legislation. That will provide another option for credit unions to be able to adapt, to grow, and to develop in the future.

The issue with that legislation is that it has not yet been proclaimed in force. There are regulations that are still required. It was passed in July 2010, so we're looking forward to that day when the legislation is actually proclaimed in force. That provided a whole different model, a whole different option for credit union growth and development, so that was a good change.

This really is more of a technical change to a number of statutes.

[The Chair, Conservative, James Rajotte]

Thank you.

[David Phillips]

It's important to us because it extends our charter. That's very important. That's why we're supportive of this legislation.

[The Chair, Conservative, James Rajotte]

Thank you.

[David Phillips]

We just want more discussion about Bank Act security.

[The Chair, Conservative, James Rajotte]

Thank you very much.

Thank you, Mr. Van Kesteren.

We'll go to Monsieur Giguère.

Mr. Giguère, the floor is yours.