Evidence of meeting #59 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was unions.
A video is available from Parliament.
5:10 p.m.
Conservative
Andrew Saxton Conservative North Vancouver, BC
Maybe I'll ask the same question then of Mr. Dobrzanski from Vancity. Do you want me to repeat the question or did you get it?
5:10 p.m.
Chief Economist, President and Chief Executive Officer, Citizens Bank of Canada, Vancouver City Savings Credit Union
Is it with respect to amalgamation?
November 19th, 2014 / 5:10 p.m.
Chief Economist, President and Chief Executive Officer, Citizens Bank of Canada, Vancouver City Savings Credit Union
Yes. Vancity, as you know, has the privilege of being both provincially incorporated as a credit union and having a federal chartered bank solely owned. Our board of directors, elected by our members, has taken a view that the credit union's purpose is for local impact and for creating and responding to our community. They continue to view that a provincial incorporation actually strengthens and enables that regional and local model.
As for the bank, the bank gives us an important plateau in the payments structure. While we are not an active deposit-taking financial institution, we remain in proper status with our regulators OSFI and CDIC.
I will say that the credit union Vancity has been supportive of the transition measures that Bill C-43 seeks to clarify, so those credit unions that wish to make the choice to become federal have a clear path and a clear line of sight.
If I can use the observation about a clear line of sight, we understand in the current structure how our cooperation with the current regulations create a line of sight for our members through our central into the payments into a federal financial institution network. It's that consultation we would wish to carry, going forward.
5:15 p.m.
Conservative
5:15 p.m.
President and Chief Executive Officer, Credit Union Central of Canada
Could I just add to my last answer? If your question relates to amalgamation, because credit unions are provincially regulated, the amalgamation within a province shouldn't be impacted by Bill C-43.
5:15 p.m.
Conservative
Andrew Saxton Conservative North Vancouver, BC
Thank you.
Mr. Dobrzanski, can you talk about the benefits of being regulated by OSFI? With your Citizens Bank, you do have a federal charter, I believe. Can you explain what the benefits of OSFI are?
5:15 p.m.
Chief Economist, President and Chief Executive Officer, Citizens Bank of Canada, Vancouver City Savings Credit Union
At the top of the house, Vancity and two other credit unions in Canada are members of the Global Alliance for Banking on Values, an organization that wants to promote transparency in risk-taking and accountability in terms of community impact.
OSFI oversight specifically at Citizens Bank has served the organization very well, as OSFI has introduced some of these international Basel standards earlier into Canada, which have shaped the risk-taking and risk preparation inside the larger credit unions across Canada. We benefit from that early and direct oversight, and are grateful for that relationship between our federal agencies that oversee Citizens Bank.
5:15 p.m.
Conservative
5:15 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
Thank you, Mr. Chair.
Thanks to each of you for joining us today.
I'd like to begin with the credit unions. We understand the importance of small business to the Canadian economy. It's essential. Over the next 10 years we're told that 50% of the small businesses in Canada will be sold, driven largely by demographic issues as baby boomers retire. We're also told by some economists that this represents a significant risk to the Canadian economy with such a big part of the Canadian economy going through succession in such a short period of time.
Given the importance of credit unions to small business lending and finance, should we be doing more to support your efforts, particularly during a time when there's going to be such a demand on small business financing in Canada? What is a specific measure that could enable you to do more to help small business—a federal measure, a tax credit, as an example?
5:15 p.m.
President and Chief Executive Officer, Credit Union Central of Canada
That's a leading question.
I was going to say that, yes, supporting the credit union system in the regulatory environment, both federal and provincial, is important because they play an important role for small business. In some of the western provinces, in Saskatchewan for example, half of small business lending in the province is delivered through credit unions. They play a very important role in that regard. As you know, one of my colleagues from the credit union was in front of this committee a few weeks ago to speak to a proposal that we've made to the federal government in terms of a small tax credit for credit unions. We've discussed that at this table before. We believe that the tax credit will allow the credit unions to retain capital and that capital is then translated into lending to small business.
5:15 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
How much of that small business lending would that tax credit result in, based on your analysis?
5:15 p.m.
President and Chief Executive Officer, Credit Union Central of Canada
Our analysis estimated that the cost to the government was about $60 million. The lending that would result, or the amount of capital that would be available to lend to small business and Canadians, would be in the neighbourhood of over $700 million.
5:15 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
Thank you very much.
Bill C-43 amends the Business Development Bank of Canada Act to allow BDC to extend credit or provide liquidity to any person through a category of transaction that's prescribed by the regulations.
Do you have any concerns that these changes to BDC's potential mandate may creep into work that you're doing? Do you have any concerns or thoughts on these changes?
5:20 p.m.
President and Chief Executive Officer, Credit Union Central of Canada
The way we have read the changes that are proposed is that they are meant to be complementary to private sector lending. In that regard we do not have any concerns about additional competition for the credit unions. Our experience with the Business Development Bank has always been that they are complementary.
5:20 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
Are you aware that some of the Business Development Bank work in lending and support is only available to traditional corporate structures and not to cooperatives as an example? Given that credit unions are part of a broader cooperative movement—
5:20 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
—do you think that the cooperative movement ought to be supported by BDC, not just typical corporate structures?
5:20 p.m.
President and Chief Executive Officer, Credit Union Central of Canada
I really—
5:20 p.m.
President and Chief Executive Officer, Credit Union Central of Canada
We'd have to have a conversation about that. It sounds logical.
5:20 p.m.
Liberal
Scott Brison Liberal Kings—Hants, NS
Mr. Yussuff, you have mentioned job numbers, stagnant job growth, youth unemployment and the whole issue of unpaid internships. I would appreciate your thoughts on how big the issue has become from your group's analysis and what we should be doing.
5:20 p.m.
President, Canadian Labour Congress
Very briefly, I think that since the recession of 2008 youth unemployment has been stubbornly high. It remains in the double digits. It really sends a bad message to young people who are trying to get an education or who have an education and can't find meaningful work. Our position is that government really needs a strong strategy to help that particular group try to find meaningful and full-time work.
Secondly, in regard to the whole argument and debate that's been going on about free internships, fundamentally we are opposed to them. Listen, we are a rich country and most of the employers who take advantage of free internships can afford to pay for internships. We have internship in the CLC. We pay people when they come in to work for the congress because we believe the first thing we should make people learn is that if you're going to work you're going to get paid for it. It's a fundamental principle. I think it's critical in the context of this debate that's going on to bring in regulations where they can at the provincial and federal level restrict that practice.
