Good afternoon.
My name is Martha Durdin, and I am President and CEO of Credit Union Central of Canada. Thank you for the opportunity to appear before you to speak to Bill C-43.
Credit Union Central of Canada is the national trade association for the 317 credit unions operating in Canada outside of Quebec. These credit unions hold over $166 billion in assets and operate out of 1,740 locations across the country. They provide over 27,000 jobs and banking services to 5.3 million Canadians.
Credit unions are provincially regulated financial co-operatives owned by their members. These member-owners play an important role in guiding the evolution of their credit unions and exercise control over their institutions on a “one member, one vote” basis.
Credit union innovation goes beyond our unique ownership structure. Credit unions have a rich history of Canadian financial sector firsts. Credit unions were the first Canadian financial institutions to lend to women in their own names. They were the first to offer daily interest savings accounts, the first to offer full-service ATMs, and the first to offer fully functional online banking.
Credit unions have strong relationships with the communities they serve.
We do not seek short-term profits and we stay invested in our communities when competitors chase profits elsewhere. ln fact, the credit union system today operates in 380 branches in communities where there is no other physical banking presence.
Credit unions also have a special affinity for small businesses.
I hesitate to raise them after the exchange a little while ago, but the Canadian Federation of lndependent Business data shows that credit unions, including Desjardins, have the second highest share of small business lending in Canada at 18.6%, just behind the Royal Bank of Canada, which of course is a much larger institution. According to the CFIB, credit unions have achieved this success because they dominate the banks in providing exceptional service to small business.
Credit unions are also a force for stability in the Canadian financial sector. Our loan growth is steady. Our average credit union loan losses have been significantly lower than those of the chartered banks.
In short, credit unions are a Canadian success story.
They are innovative, community-focused, a key support for small business, and a force for stability in volatile times. They are key elements in a competitive financial sector ecosystem. The success is a product of efforts at individual credit unions but it is also the result of collaboration between credit unions. Over time this collaboration has built provincial centrals, and more recently, regional centrals like Central 1 in B.C. and Ontario, and Atlantic central that provide back-office services to credit unions across provincial boundaries.
Collaboration helps the credit union system build scale and find common approaches to technology, branding, liquidity management, compliance, and market strategy. ln many instances, this collaboration has been aided by a federal legislative framework that has facilitated cooperation across the credit union system. That brings me to Bill C-43.
Bill C-43 proposes significant changes to the federal framework that has governed aspects of the credit union system for decades. These proposed legislative changes were initiated by the federal government in the budget in 2014, as you know, and were not made at the request of the credit union system.
ln basic terms, Bill C-43 will reorder the federal government's relations with the credit union system. This is particularly true with regard to the relationship with the provincial credit union centrals, and regional credit union centrals.