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Evidence of meeting #55 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was company.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Jeremy Rudin  Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
Normand Lafrenière  President, Canadian Association of Mutual Insurance Companies
Karen Gavan  President and Chief Executive Officer, Economical Insurance Group
Dan Lister  President and Chief Executive Officer, Kings Mutual Insurance Company
James Wu  Chief, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance

4:25 p.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

Thank you.

4:25 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Mr. Hoback.

We'll go to Mr. Marston, please.

4:25 p.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

Ms. Gavan, I'm gathering from the commentary in the last question that, in essence, your company wants to demutualize. They're the largest company in the group now and they want to become larger. Is that a fair assessment of what you just said?

4:25 p.m.

President and Chief Executive Officer, Economical Insurance Group

Karen Gavan

That's a fair assessment.

4:25 p.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

Okay. At least that part's on the table. I'm pleased to hear that.

Currently, can a mutual policyholder sell that policy and get a reward for their investment?

4:25 p.m.

President and Chief Executive Officer, Economical Insurance Group

4:25 p.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

So, there are two sides to this. You have a potential large benefit for 943 people, there. You have the growth of the company, over here.

One of my favourite sayings is: the law is for the protection of the people. Mr. Lister, I might go to you on this one. Ms. Gavan talks about a community of interest and the community of interest for her is Economical. When I listened to both of you and Normand, the community of interest is broader. In your view it's all of the companies that came together over the last number of years to protect their policyholders. Would you agree with that?

4:25 p.m.

President and Chief Executive Officer, Kings Mutual Insurance Company

Dan Lister

The reason we started in the first place was because the product wasn't available in the market. In our case I think there were six farmers sitting around the table in a small community, where our head office still is, who made that decision and moved forward.

4:25 p.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

When I think in terms of farmers and the type of thing you're talking about, and in southwestern Ontario with the number of small farmers who are now being gobbled up by agribusiness, this is almost in a sense opening the door for a similar type of thing to happen here. I don't want to overstate what Economical is trying to do, but there are other players in the world too that might want to take advantage of this situation. Would you agree with that?

4:25 p.m.

President and Chief Executive Officer, Kings Mutual Insurance Company

Dan Lister

Our concern is that we have other parties coming in and getting involved in this process.

4:30 p.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

To the department officials, like my colleagues, I'm struggling a little bit with the call for the briefs to come in to the department. I assume that the original intent of those briefs coming in was to inform the minister in advance of this. Where in that equation was the plan to inform this committee? Was there a plan to do that?

4:30 p.m.

Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance

Jeremy Rudin

The first purpose of the consultation was to get information and opinion in order to inform the minister and to help departmental officials, such as myself, to provide our recommendations. It's common, although there is not a hard and fast policy, to share those submissions publicly. We think it's a good approach and we are planning on doing that.

4:30 p.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

Excuse me for a second here. I'm not talking about sharing them publicly—I was talking about sharing them with a committee of Parliament.

4:30 p.m.

Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance

Jeremy Rudin

I see what you mean.

4:30 p.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

Was there a plan to do that?

4:30 p.m.

Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance

Jeremy Rudin

In some cases, we do not publish the submissions, although those who submit are free to publish them on their own. In other cases, we make them available to the general public, and so in that way to the committee members.

4:30 p.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

So the committee has to duplicate your work at some point, if we want to get access to the information and the decision was made not to publish it.

4:30 p.m.

Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance

Jeremy Rudin

I appreciate that.

4:30 p.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

This is a very valuable tool to our committee and in our efforts.

I look back to how our government—I don't expect departmental officials to respond to this—has said that we did so well in the recession because of the regulation factor.

In fact, I'll turn it on its head just a little. I will ask you a question. The call for submissions, the activity from the minister's office, was that generally solely because Economical wanted to make this change, or were there other groups calling for the same kind of change?

4:30 p.m.

Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance

Jeremy Rudin

That's a good question. Let me defer to my colleague here. Certainly, Economical, I was aware of. Were there any others?

4:30 p.m.

James Wu Chief, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance

No, Economical was the key stakeholder that brought forward a request for a demutualization framework to be put in place.

4:30 p.m.

NDP

Wayne Marston NDP Hamilton East—Stoney Creek, ON

At least they're going to keep us working.

Thank you, Mr. Chair.

4:30 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Mr. Marston.

We go to Mr. Adler.

4:30 p.m.

Conservative

Mark Adler Conservative York Centre, ON

Thank you, Chair, and my thanks to all the witnesses for appearing here today.

If I wanted to get into the business, how would I go about it? What are some of the barriers to entry?

4:30 p.m.

President and Chief Executive Officer, Economical Insurance Group

Karen Gavan

To establish a mutual...?