Finance Committee on May 8th, 2018

[The Chair, Liberal, Wayne Easter]

We'll have to end it there, Pierre, and turn to Mr. Sorbara.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. Chair, and welcome, everybody.

Obviously, I'd like to start on the credit union side—part 6, division 16, subdivision C. As chair of the all-party caucus, I worked with my colleagues from the other side, Mr. Albas and Mr. Boulerice, and many other folks for quite a period of time. We reached a point where the information contained in the BIA legislation provides certainty for credit unions to continue serving many millions of folks across the country.

My very simple question is, how important was it to the Credit Union Association and its members that that certainty be achieved?

[Athana Mentzelopoulos]

First of all, thank you again.

It saved the sector at least $80 million, and most folks figured that was a pretty conservative estimate. Had we had to implement the changes that we thought for a while were going to be required, it would have been a huge effort and extremely costly. That's the starting point.

It's more difficult to capture the value of what it could have meant from a competitive point of view, because if we had had to adopt and socialize a whole new vocabulary around financial services and tried to communicate with members and potential members on that basis, it would have been extremely expensive and undermined the sector in very significant ways.

Finally, I would say that our members met last week in Toronto at a conference, and to a person, first of all, we're grateful that the Minister of Finance and members of Parliament not only supported this but also recognized how important an issue it had been over the previous year.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you for that. Marc-André and I had the pleasure of attending that conference and being on a panel with various members and hearing about the great goings-on, not only with our co-operative system here in Canada but also the one in the U.S., specifically the U.S. Midwest. It was great to hear; it was a great collaboration among many of us. It was just a great way to get things done. I am very pleased to have this in subdivision C, the bank terminology.

This question is for the credit unions but also for Mr. Braid.

Within the 2018 budget we listed four bullet points on modernizing the financial sector framework: flexibility for financial institutions to take investments in fintech, permitting life insurance companies to make long-term investments in infrastructure, the credit union changes, and reviewing the sunset date in the federal financial institutions statutes.

Peter, I'm in full agreement with you. I believe that separation at the point of origination should still exist. We need to maintain a competitive landscape for consumers, and it applies to credit unions. In terms of banking terminology, we need to maintain the competitive landscape.

In your view, with fintech changing the landscape every day, how should our framework change for financial institutions to adapt to what's going on in the world?

[Peter Braid]

Thank you, Mr. Sorbara, for your question, for your support of the broker channel, and for the separation of the pillars of insurance and banking.

The Insurance Brokers Association would support those various goals that the federal budget has set out. I think moving forward what is important is that the government find the right balance between fostering innovation on the one hand and protecting consumers on the other. Serving the best interests of consumers, protecting the consumer's best interest, is what is paramount for insurance brokers across the land.

It is really, then, about finding the balance. Insurance brokers understand that consumer demand is changing and technology is rapidly evolving, and brokers want to embrace and adopt those changes as well.

It's critical that the aspects of our current law that have served consumers so well and protected their interests be maintained as the landscape continues to evolve, including through fintech activities.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Let me stop you there. I would like to add one comment, and then I am going to switch.

Within our purview of modernizing the financial sector framework, I think we've hit on some key things. Permitting life insurance companies—the “life cos”, the big four in Canada—which are sitting on hundreds of billions of dollars of investable capital and who have a long-tail risk horizon, to use that investable capital for Canadian projects is very powerful, as is looking at the fintech area.

I am going to stop on the finance side.

John, how are you? It's nice to see you.

[John Callaghan]

I am well, Mr. Sorbara. How are you?

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

I'm very well, thank you.

Will this investment that we're making in the unified family courts shorten the times for people and reduce their costs? For folks who are unfortunately going through that situation because of family matters, it is becoming quite burdensome and expensive, and many middle-income and low-income families just can't afford it.

[John Callaghan]

Yes. The hope is, and I think it is shown in the unified family courts that we have, that it will be managed better so that it is less expensive and less time-consuming.

Family law is a very emotional issue that takes a lot of resources. One of the challenges is to re-imagine somehow our family law system at some point in time, because it has taken an emotional toll. It's going to take political leaders and policy leaders such as the people in this room to make that happen.

As I say, 60% of these families are going through two courts and, if they're going without assistance, have to deal with two different ways of doing things, two separate sets of forms, two separate everything. The hope is that we will reduce time and that this change will reduce the money expenditure.

Professor Bala might be able to give you real statistics on this. I don't know.

[The Chair, Liberal, Wayne Easter]

Professor Bala, do you want to come in?

[Prof. Nicholas Bala]

We don't have the kinds of statistics that we'd like. We don't even have the most basic data about family justice in Canada. However, having said that, I think it's clear from everybody who's involved in the family courts in different parts of the country.... I should say in Kingston, where I live, we have a unified family court. You go 50 miles down the road to Belleville and they don't have one. It's clear for lawyers who practise in both places that there are real cost savings to litigants as a result of having a unified family court. It's a more effective, more efficient system. Quantifying that saving is going to be very difficult, but there's no doubt that it's helpful, more efficient, more effective, and less expensive.

[The Chair, Liberal, Wayne Easter]

Thank you, all.

Mr. Braid, FINTRAC has come up. I know that the insurance brokers didn't make a presentation before this committee on the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, for which we're doing the five-year statutory review. In fact, you mentioned FINTRAC. I think we've heard from over 80 witnesses now, but if you have any views on that, send the clerk a note. The deadline for the Department of Finance is May 18.

There are two processes. There is the committee process and the statutory five-year review, and there's the Department of Finance process as well. Our report won't be tabled until early fall, so if you have any thoughts on that as insurance brokers, just send the clerk a note, or also do the same with the Department of Finance. That's just for your information.

[Peter Braid]

Thank you.

[The Chair, Liberal, Wayne Easter]

Mr. Albas.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Chair, my question is for you. Which process is better, the Minister of Finance's or—

[The Chair, Liberal, Wayne Easter]

There is no question; this one is the best in the land.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

That's a good answer. I'm glad we have that on the record. Hopefully that will be part of our discussion on this.

I'd like to go back to Mr. Bala just for a second.

Sir, you mentioned that there is not a unified amount of information regarding the justice system. Could you just elaborate on what you meant by that?

[Prof. Nicholas Bala]

We don't even know how many divorces there are a year in Canada. Because of the changes in Statistics Canada over the decades, we have much less basic statistical data now on family justice than we did in the past, let alone the kind of research that, understandably, your committee and others, and members of the public want to know. So, if we do this, what are the savings going to be, and so on? We need both a lot more statistical data, which should be obtained and, in some cases, was obtained by the government, and more broadly, we need more research on family justice.

[John Callaghan]

Sorry, I would like to add something. I just finished a report on Legal Aid and the Law Society's relationship with it. We went through a long consultation with academics, with various institutions, and what Professor Bala says was proven out. Both at the federal and provincial levels, the statistics are really not there, which is causing a real problem when you want to try to do evidence-based policy-making and try to get academics engaged in areas so they can move the dial from a social perspective.

There's something called the Institute for Clinical Evaluative Sciences, running out of Sunnybrook Hospital, which has all the OHIP data in the province of Ontario. It was seeded by the Province of Ontario, and basically runs with some funding. It is probably the number one epidemiological institute in the world at the moment. It's done by maintaining, housing, and scrubbing data, and then they get the data out to the universities. We have nothing comparable in the legal world, and it's a real problem.

When I met with the people at ICES—it's a terrible acronym, but they were there before the other ISIS—the Institute for Clinical and Evaluative Sciences, I asked them about it and they said they had one study. The study was about people with major head trauma who had been incarcerated. The incarceration data didn't come from the justice sector, it came from Correctional Service Canada. They found a correlation between someone having a major head trauma and a significant—I can't tell you the percentage—likelihood of their being incarcerated. That's social data I would have thought we would want to have, and yet the justice sector doesn't actually contribute a great deal to that discussion.

I just echo Professor Bala's comments.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

We have tremendous respect, obviously, for the independence of the judicial branch. Obviously, how it runs the courts is typically kept somewhat at arm's length from politicians. Where is the issue that we're not getting such data? Is it just because there's a governance gap here, where there isn't the ask or request for this, or is it just academics asking? It does sound to me like a very common sense thing that we would try to work towards.

[John Callaghan]

I think at one level it's purely a coordination issue—there hasn't been a coordinated effort. There is a concern that some courts don't release their data, that the amount of data that's available isn't there. One of the criticisms is that the data is not that accurate. Well, do you want to solve the data problem? Produce the data and it'll be more accurate, because people will have to account for it.

At the end of the day, it's a combination. It's not just the courts; it's other sectors, too. I'm here for the Law Society of Ontario. I'm sure someone like Professor Bala can tell you more about all the various areas where he would like to get data to further his research. We heard this same complaint...and that report, the legal aid report, was only released in January. So it's out there.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Before we go to Mr. Bala, I'd just like to ask one thing. You said it's a coordination issue. Can you define that coordination issue, the players, and what the dynamic is, specifically?

[John Callaghan]

First of all, I think you have to have political will. So it involves the provinces. It involves the feds, because they'll have statistical data. You can't do it without the academy, because the academics are the ones who are going to do the research. Institutions like the Law Society, which probably wouldn't have a significant amount of data, can actually provide a significant facilitating role, because we can bring people together if people wish to come together.

I think it also requires some real discussion about who keeps the data. Is it kept by the government? Is it off-government? Is it kept by some institution that isn't going to appear to be manipulated? Long term, you're trying to provide evidence-based research for you, the policy-makers, but you're also trying to provide evidence-based research for the academics—not me, but the Professor-Bala types.

No disrespect, Nick, but a young Professor Bala comes in and says he wants to change the family law system and it's going to take him 25 years to get the policy-makers onside. Well, they need the data, and they need to be able to analyze it and provide back to you policy-makers that this is what's in the best interests of Canadians. If you don't provide the fertile ground for the statistics in what we have, then it's a problem. That has been a comment we heard, and I jumped on with what Professor Bala said, and what you said, which we heard most recently in our report. So I think it's all of those things.

We are trying to see, in the Ontario context, about bringing those things together. You guys play in a much bigger sandbox on the federal side, and we're trying to do that on the provincial side. But you know what? Some federal initiative, some federal leadership in this area, would probably benefit everybody.

[The Chair, Liberal, Wayne Easter]

Professor Bala, you want in—you want in the sandbox.

[Prof. Nicholas Bala]

Yes, I know how to get attention here.

I should say that the issue of the independent judiciary is very important. Judges want this information as much or more than anybody else, and they are happy to have better data. Part of the responsibility rests with Statistics Canada, which has stopped collecting certain kinds of data. I know that, at least in part, it's because of funding issues.

Another issue has been the lack of government-supported leadership, the political will to do fundamental research about the family justice system. Mr. Callahan mentioned health research. We have one research institute in Canada that looks at family justice, the Canadian Research Institute for Law and the Family at the University of Calgary. It is in the process of being shut down because of lack of funding.

So there's not nearly enough funding for family justice research. When I'm talking about family justice, it's not something that the academics want to know. It's something that judges want to know, lawyers want to know, and parents want to know. They want to know what kind of longitudinal data we have on what is going to help families, parents, and children going through the divorce process. What is going to get better outcomes for children? We do that kind of work in the health care system. We do it in the environmental areas. We don't, however, do it in family justice, and this is a major problem.

The problem certainly has to do with more resources and more personnel. Mr. Callahan mentioned “young Professor Bala”. Well, we're not even hiring family law professors. When you hire professors, you don't say you need more people to do banking law and technology law. When a family law professor dies or retires in this country, they're typically not replaced by another family law professor. So it goes up and down the line.