Evidence of meeting #72 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was recommendations.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Clerk of the Committee  Mr. Jean-François Lafleur
Ursula Menke  Commissioner, Financial Consumer Agency of Canada
Jeremy Rudin  Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance

4 p.m.

Conservative

Ted Menzies Conservative Macleod, AB

It's the same mechanism.

4 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Well, not too many low-income Canadians have maxed out on their RRSPs, Minister.

4 p.m.

Conservative

Ted Menzies Conservative Macleod, AB

And there may not be that many who max out on their PRPPs, but it's another option for them, and it's a low-cost option. It's very simple for the employers. The employers are the ones who have asked for an option to do this.

4 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Are you saying that every low-income Canadian ought to invest in PRPPs?

4 p.m.

Conservative

Ted Menzies Conservative Macleod, AB

I'm saying that anybody who has any funds available, we would certainly encourage them.... The people that the PRPPs are targeting—the sector of the economy—are not the lowest-income individuals but the mid-income individuals, who, as I say, make up 60% of the workforce in this country. If there's another option for them to be able to save, I count that as a good thing for them.

4 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

When will the office—

4 p.m.

Conservative

The Chair Conservative James Rajotte

Last question, very briefly.

4 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

When will the office be up and running and what will be the annual budget for the leader?

4 p.m.

Conservative

Ted Menzies Conservative Macleod, AB

Step one is to get this through the House of Commons and through the Senate, and we'll see where it goes from there. I'd like to see this happening as soon as possible, so I would encourage you to get this legislation through as quickly as possible.

4 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

What's the budget?

4 p.m.

Conservative

Ted Menzies Conservative Macleod, AB

Sorry?

4 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

The budget?

4 p.m.

Conservative

Ted Menzies Conservative Macleod, AB

We put $3 million in last year's budget for this.

4 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Mr. Brison.

We'll go to Mr. Adler, please.

September 24th, 2012 / 4 p.m.

Conservative

Mark Adler Conservative York Centre, ON

Thank you, Chair. I want to congratulate you on your re-election. We're looking forward to working with you, I know, and with the whole committee.

Minister, I'm so glad you're here today. Thank you very much. I know you have a busy schedule. Thank you for taking the time to be with us this afternoon.

I do want to say a couple of things. First of all, Canada is well known as having one of the strongest economies in the G-8 and the strongest job creation record. Is this not another pillar in creating a sustainable economy and in keeping us at the forefront of economic development, long-term prosperity, and job growth? You were in Moscow at the end of August and on a panel talking about financial literacy, and Canada once again was out in the forefront.

Other countries are looking to Canada, which is taking the lead on all of this because Canada recognizes the importance of financial literacy—the importance of having an informed consumer, which leads to a stronger economy. Could you just comment quickly on that? I do have a supplementary I want to get to.

4:05 p.m.

Conservative

Ted Menzies Conservative Macleod, AB

Thank you, Mr. Adler, for your question.

At the APEC finance ministers meeting, it was very interesting that Canada was one of the lead discussants on financial literacy. It's not that we're the only ones moving forward with it, but they liked the task force report. Many of them had read it.

Many of the APEC countries had read it, had looked at it, and certainly had questions about what we are moving forward with and about the fulfilment of the first recommendation on the financial literacy leader. Many of them are thinking along those same lines. Canada is a leader in that as well.

4:05 p.m.

Conservative

Mark Adler Conservative York Centre, ON

Thank you.

I do want to ask you about credit cards. As you know, there are a lot of options out there for consumers. It used to be really a mark of prestige when you'd have an American Express card, and now it seems like everybody has one. There seem to be a lot of options out there.

Our government has taken a lot of steps to make the credit card sector more transparent and more accountable. I was wondering if you could talk a bit about what our government has done to make the credit card industry more accountable, more transparent, and address helping Canadians understand the variety of options available to them.

4:05 p.m.

Conservative

Ted Menzies Conservative Macleod, AB

Thank you.

There are many options. I referred earlier to the fact that there's a myriad of options, from credit cards with the most perks you can imagine in the world to the ones that people tend to forget about, the very low-cost cards that actually are available to them. We heard from the retail sector on the challenges they've faced with people wanting to use their high-end cards, their platinum or gold cards. There is a cost to retailers, and we recognize that. Consumers didn't realize that.

There are many other things that consumers didn't realize. One was that we mandated that there be a summary box in the contracts, or in the applications for a credit card, that clearly states to the consumer, to the person who is going to have their name on that card, what the features are, and what the rates are, and what happens if they don't pay off that amount every month.

Clearly letting people know...and you'll see this box on your card statement every month now how many years it will take for you to pay off that balance—it's shocking when you have a large number on that card—if you make the minimum payment that is in the bottom line. It's not that they were encouraging people to make the minimum payment. That option was there for them. But people had no concept of how many years it would take them to pay that off.

The disclosure of interest rate changes: that's now mandated so that those changes have to be disclosed to individuals. There's the minimum 21-day grace period for new purchases. If you make new purchases, this interest fee waiver for 21 days...lower interest costs through mandatory allocations to the previous costs or previous amounts on there rather than the latest costs.

So those interest rates add up, interest amounts add up, but people will act differently if they understand what the consequences are.

4:05 p.m.

Conservative

The Chair Conservative James Rajotte

Okay, thank you—

4:05 p.m.

Conservative

Mark Adler Conservative York Centre, ON

One quick question, just ten seconds?

4:05 p.m.

Conservative

The Chair Conservative James Rajotte

I'm sorry.

4:05 p.m.

Conservative

Mark Adler Conservative York Centre, ON

Ten seconds?

4:05 p.m.

Conservative

The Chair Conservative James Rajotte

We're out of time, but we can go to the next round.

4:05 p.m.

Conservative

Ted Menzies Conservative Macleod, AB

That's why you elected him chair. He's tough.

4:05 p.m.

Conservative

The Chair Conservative James Rajotte

Tough but fair.