Finance Committee on May 29th, 2012

[The Chair, Conservative, James Rajotte]

Okay. There are three minutes left.

[Shelly Glover, Conservative, Saint Boniface, MB]

In the three minutes I have left, I do want to take a moment to thank all of you for your service. That includes everyone on the panel, including Ms. Londerville, Mr. Kennedy, and so on.

I want to make a comment, though, that the budget implementation act includes these measures because we believe sincerely that they are the right measures to protect the interests of Canadians, and that they're the right measures to protect the interests of our law-enforcement community and the people who would be working in SIRC.

Having said that, I know, Mr. Zigayer, you haven't had much opportunity to speak, but I would like to offer you the opportunity to close here today and tell us why it's important that these measures be put in this budget implementation act—the first one, rather than in the fall session—and how this will actually improve and enhance security for Canadians.

[Michael Zigayer]

Well, it's always up to the government when to introduce a bill and how to introduce it. In fact this is the third time this particular legislation has come before Parliament. It was before Parliament once in the House of Commons. It was introduced in the House, and it died very shortly after being introduced. Then it was introduced in the Senate and died again when the last election was called.

So we all have our fingers crossed on this one, because frankly I think we all believe it to be a very good initiative. I'll just hit a few points. We don't have any Shiprider operations at present. We've had a number of Shiprider pilots—in 2005 and 2007—and you've heard those described. But we have also deployed Shiprider operations—we called them marine security operations—in support of a number of events that have had important cross-border maritime components: the Olympics in Vancouver, the G-20 in Toronto last year, and also the Super Bowl that was in Detroit back in January of 2006.

The people who have been involved in it have had numerous opportunities to perfect it and to improve the training, and they're becoming quite adept at the training. The RCMP has a fairly large number of people already trained. The United States Coast Guard has to retrain a number of its people, because they get redeployed after a number of years. So the training is ongoing.

The other point I want to make is that—

[The Chair, Conservative, James Rajotte]

Please make it very brief, sir.

[Shelly Glover, Conservative, Saint Boniface, MB]

In the U.S., has enabling legislation already gone through?

[Michael Zigayer]

The U.S. did not enact any legislation. They're using something called title 19, which is about customs. That's how the officers in Windsor get the authority to carry a firearm into the U.S.

But the one point I want to make is that we engaged with Public Safety in consultations back in 2008. One of the most important things to come out of that was the fact that those consulted—the Attorneys General, the lawyers, and others—all wanted the Americans to be subject to our law—not only to enforce our law but to be subject to it as well.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Mr. Garrison again please.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

Thank you very much, Mr. Chair.

It's a little hard to resist some of the darts that were flung in this direction earlier. But I think it illustrates that if these matters were before the public safety committee, members have a chance to get to know each other a bit better and to know their background and expertise. I can assure Ms. Glover that I do have some background in use-of-force protocols as a UN observer—

[Shelly Glover, Conservative, Saint Boniface, MB]

And the use of force.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

—and as an Amnesty International observer working with the police academy in Afghanistan.

I think once again it illustrates that if these matters were before the proper committee, we wouldn't have these little exchanges where people don't know each other well and don't really know the background.

I want to return to Mr. Kennedy and ask him a little bit about the existing SIRC committee. My understanding of the committee is that it is composed of part-time members with no particular expertise, with very limited staff support. What we're talking about, as you mentioned earlier, is transferring some very large responsibilities. Could you say something about that kind of difference of role and the different kinds of people who are on the SIRC committee as opposed to an Inspector General?

[Paul Kennedy]

I think that is part of the problem. I'm sure they're all very competent people. I say that vis-à-vis my successor, who just didn't happen to have any background in criminal law but had a background in estate planning. Don't come to me for estate planning, but come to me for criminal law and go to him for estate planning.

I notice there are at least two people who are still left who are MDs. I really couldn't see the relationship. They're distinguished people but I would have thought that maybe SIRC itself would benefit from someone who had a background in something akin to national security in one form or another.

If you want to have credible oversight, the analogy I used before is with a race car and I think it's appropriate. If you want to win a race, what do you need? You need three things. You need a car that has a powerful engine. That's a legislative mandate. You' have to have fuel. That's money. You have to have a highly skilled driver. You put those things together, you win the race. If you want to have credible oversight, you have to have those three things.

There have been some very distinguished people who have certainly sat on SIRC who I have great respect for, but at times it looks like it's an afterthought. It shouldn't be an afterthought that you don't have a permanent chair of SIRC right now. I don't know what kind of a message that sends to the public. You're eliminating the IG's office because the IG hasn't been replaced. You're eliminating that office and you don't have a chair for SIRC. The reality is you have four people who I believe have full-time jobs who come in part time to do this. What does that send as a signal to the Canadian population about our domestic intelligence agency? It's a very poor signal.

[The Chair, Conservative, James Rajotte]

Thank you. Two minutes.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

One of the other things that you touched upon I think is the importance of oversight for having credibility for not just the minister but the institution, and I would also add getting public cooperation with an agency like CSIS. If you don't have public confidence in the oversight, is this likely to affect the amount of cooperation that the public gives to the agency?

[Paul Kennedy]

One of the challenges we dealt with, and the service would be dealing with today, is that the vast bulk of people who come to this country as new Canadians come from parts of the world where the intelligence services are very unpleasant folk, and it's hard to get out of their mind that mindset when they come over here and deal with us. Our intelligence service is different. They don't assume that, so you do need their cooperation in terms of dealing with homegrown threats and things of that nature.

If you want to find out, look at the submission, as I pointed out, that CSIS itself made to the Arar commission inquiry in part two where it talked about in the early days—and I was there—there were very rough relationships between them and SIRC. Those improved over time because they realized the value of having an independent third party who could speak to the public with some credibility. But that means you'd better staff that vehicle in such a way that it is credible. Mandate, fuel, money, and personnel who have the right competencies, not long CVs, not sitting there drooling because their best days are behind them. Someone with a bit of vigour who knows what this is about and knows how to articulate that. That is the best way of enhancing the credibility of CSIS in Canada with the Canada that we have today.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

Would you say that would make CSIS a more effective force?

[Paul Kennedy]

Yes.

[The Chair, Conservative, James Rajotte]

Thank you.

Colleagues, on the agenda it says until 8:30. We will have bells sometime after 8 and then at that time we will adjourn. But at this point, we'll keep going. I just wanted to let you know I will continue until that time.

I wanted to ask Ms. Londerville a few questions. I appreciate your support for the measures in the bill with respect to more transparency and accountability and moving the enhanced role for OSFI in terms of housing and CMHC. You stated in your presentation you'd like to see a full analysis of the differences, though, in coverage between the private and public insurers before we argue one deserves a different backing than the other. Who would you recommend should do that analysis?

[Prof. Jane Londerville]

It's not very complicated. You really simply spread out all the loans on a map and see if there's a difference in the coverage. It could be anybody. It could be an academic, or it could be.... I mean, the private insurers' data is basically public, so you get the data from the two, you merge them, and you see if there are differences.

[The Chair, Conservative, James Rajotte]

I wanted you to expand on that because CMHC does make the point that they're a bit of a hybrid in terms of an agency, in terms of their social housing role. So can you respond fully in terms of their argument that they are different in kind from a company like Genworth?

[Prof. Jane Londerville]

They are, but they're not. Should they be using their mortgage insurance revenues to fund those other activities? They don't really. They get an appropriation from the government for social housing programs, and that sort of thing, so I don't see the fact that they do housing policy and affordable housing and work in that area.... To me, that's totally separate from the fact that they do mortgage insurance, which is a profit-making venture for them, and I don't think one should subsidize the other.

I think we should be explicitly saying that this is what we want to do in terms of housing policy. Let's fund it out of government revenues. Mortgage insurance is a separate issue.

[The Chair, Conservative, James Rajotte]

Okay.

Can I ask if there are any...? As you know, the government has taken a number of steps in terms of trying to ensure that there's no housing bubble here in Canada. You've referenced the fact that we have not had a housing crisis here like they've had in the U.S.

From a policy point of view, is there anything further we should be looking at?

[Prof. Jane Londerville]

We've tightened up the lending requirements quite a lot. If you're buying a property to rent to other people, for example, you can only get an 80% loan on that. You used to be able to borrow 95%, so I don't think we need to go.... We don't want to tighten them so far that we cause a downturn in the housing market. That would be disastrous.

[The Chair, Conservative, James Rajotte]

My final question here is on the proposed changes to the covered bonds. Can you talk in terms of how it's affecting or will affect, in your view, the financing costs of mortgage rates? Will there be any impact?

[Prof. Jane Londerville]

Covered bonds are a way for banks and financial institutions to bring in more funds. By having the legislation there, they can package their mortgages. Basically, they're keeping those mortgages. It's not like they're selling them into mortgage-backed securities. They're issuing a bond that's backed by those mortgages, and bringing in funds.

The fact that they can't put insured loans in there might mean they have to pay a little more interest on them, but it will bring in additional funds that they can then use for lending, including lending for mortgages. I think overall it's a positive thing. As I say, some people can't invest in those unless there is government legislation.

[The Chair, Conservative, James Rajotte]

I appreciate that.

I was going to give the rest of this round to Mr. Jean. Do you have a short question, please?