Evidence of meeting #184 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was proposed.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Manuel Dussault  Senior Director, Framework Policy, Financial Sector Policy Branch, Department of Finance
Justin Brown  Director, Financial Stability, Financial Sector Policy Branch, Department of Finance
Peter Fragiskatos  London North Centre, Lib.
Yuki Bourdeau  Senior Advisor, Capital Markets Division, Financial Sector Policy Branch, Department of Finance
Eleanor Ryan  Director General, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance
Jean-François Girard  Director, Consumer Affairs, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance
Brigitte Goulard  Deputy Commissionner, Financial Consumer Agency of Canada
Kim Rudd  Northumberland—Peterborough South, Lib.
Mark Schaan  Director General, Marketplace Framework Policy Branch, Innovation, Science and Economic Development Canada
Ian Wright  Director, Financial Crimes Governance and Operations, Department of Finance
Darryl C. Patterson  Director, Corporate, Insolvency and Competition Policy Directorate, Marketplace Framework Policy Branch, Department of Industry
Martin Simard  Director, Copyright and Trademark Policy, Marketplace Framework Policy Branch, Department of Industry
Andrea Flewelling  Senior Policy Advisor, Marketplace Framework Policy Branch, Department of Industry
Patrick Blanar  Senior Policy Analyst, Patent Policy Directorate, Department of Industry
Dale MacMillan  Vice-President, Corporate Services and Chief Financial Officer, National Research Council of Canada
Christopher Johnstone  Director General, National Programs and Business Services, National Research Council of Canada
Eric Grant  Director, Community Lands Development, Lands and Environmental Management, Lands and Economic Development, Department of Indian Affairs and Northern Development
Leane Walsh  Director, Fiscal Policy and Investment Readiness, Economic Policy Development, Lands and Economic Development, Department of Indian Affairs and Northern Development
Susan Waters  Director General, Lands and Environmental Management Branch, Lands and Economic Development, Department of Indian Affairs and Northern Development
Michèle Govier  Senior Director, Trade Rules, International Trade and Finance Branch, Department of Finance
Katharine Funtek  Executive Director, Trade Controls Policy, Department of Foreign Affairs, Trade and Development
Bev Shipley  Lambton—Kent—Middlesex, CPC
Nicole Giles  Director, International Trade and Finance, Assistant Deputy Minister's Office, Department of Finance
Deirdre Kent  Director General, International Assistance Policy, Department of Foreign Affairs, Trade and Development
Mark Lusignan  Director General, Grants and contributions Management, Department of Foreign Affairs and International Trade (International Trade)
Michelle Kaminski  Director, Office of Innovative Finance, Grants and Contributions Management, Department of Foreign Affairs, Trade and Development
Chantal Larocque  Deputy Director, Development Finance, Grants and Contributions Financial Policy, Foreign Affairs Canada
Danielle Bélanger  Director, Gender-Based Analysis Plus and Strategic Policy, Policy and External Relations Directorate, Status of Women Canada
Alison McDermott  General Director, Economic and Fiscal Policy Branch, Department of Finance
Derek Armstrong  Executive Director, Results Division, Expenditure Management Sector, Treasury Board Secretariat
Lori Straznicky  Executive Director, Pay Equity Task Team, Strategic Policy, Analysis and Workplace Information, Labour Program, Department of Employment and Social Development
Don Graham  Senior Advisor to the Assistant Deputy Minister, Compensation and Labour Relations Sector, Treasury Board Secretariat
Bruce Kennedy  Manager, Pay Equity Task Team, Labour Program, Department of Employment and Social Development
Richard Stuart  Executive Director, Expenditure Analysis and Compensation Planning, Expenditure Management Sector, Treasury Board Secretariat
Colin Spencer James  Senior Director, Social Development Policy, Strategic and Service Policy Branch, Department of Employment and Social Development
Andrew Brown  Director General, Employment Insurance Policy Directorate, Skills and Employment Branch, Department of Employment and Social Development
Barbara Moran  Director General, Strategic Policy, Analysis and Workplace, Labour Program, Department of Employment and Social Development
Rutha Astravas  Director, Employment Insurance Policy, Special Benefits Policy, Department of Employment and Social Development
Charles Philippe Rochon  Senior Policy Analyst, Labour Standards and Wage Earner Protection Program, Workplace Directorate, Department of Employment and Social Development

4:15 p.m.

Liberal

Greg Fergus Liberal Hull—Aylmer, QC

I think amicable settlements are always preferable. That said, it is important that one or two exemplary penalties be imposed. Have you ever imposed on any institution the current maximum penalty of $10 million, which may have been lower in the past?

4:15 p.m.

Deputy Commissionner, Financial Consumer Agency of Canada

Brigitte Goulard

We never imposed the maximum penalty because we want to keep some leeway. If we impose the maximum penalty for a given violation, what will happen if the next breach is worse than the previous one? We are very happy to see that penalties are being increased, because that will give us a lot more leeway to impose higher penalties.

The provision of the bill that mandates that in future a financial institution that has caused injury to Canadians will be named is also a good thing. We are pleased that the bill contains transparency provisions.

4:15 p.m.

Liberal

Greg Fergus Liberal Hull—Aylmer, QC

Thank you.

4:15 p.m.

Liberal

The Chair Liberal Wayne Easter

Mr. Julian.

4:15 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

Thank you very much, Mr. Chair.

Ms. Goulard, in replying to Mr. Fergus' question, you said that you had never imposed the maximum penalty because you wanted to keep that for a much more serious violation. If I understand correctly, you would like the changes to the act to impose much higher penalties, which would have much greater impact.

4:15 p.m.

Deputy Commissionner, Financial Consumer Agency of Canada

Brigitte Goulard

The vast majority of cases involve technology errors or inadequate disclosure. There have not been any fraud cases like the ones in the United States.

In the past, it was important that we keep some room to manoeuvre, but with the proposed changes, we will have much more flexibility to impose higher penalties. Our financial institutions are quite large. This will give us the necessary flexibility.

4:15 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

Fine.

Thank you very much, Ms. Goulard.

I'm going to go back to Mr. Kmiec's question about whistle-blowing. I just want to make sure I understand the process, given the changes in the law. It's complaint-driven, as I understand it. If a whistle-blower is sanctioned by the bank, what then happens, according to these changes, to protect that whistle-blower?

4:15 p.m.

Director, Consumer Affairs, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance

Jean-François Girard

The protections, as I mentioned, can be administered from an administrative perspective to ensure that the institutions comply, but it could be prosecuted as a criminal offence as well. People would be protected through these provisions here.

4:15 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

Okay. I'm actually looking for a more practical statement of what the follow-up would be. There's a bank employee who blows the whistle on the institution—a clear violation of the law—and then that bank punishes the whistle-blower. In terms of the complaint, is it up to the individual who was fired because they blew the whistle on their bank? Is it up to the Financial Consumer Agency of Canada?

Who, then, follows up so that those penalties are actually imposed and there's a process?

4:15 p.m.

Director, Consumer Affairs, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance

Jean-François Girard

For the agency to administer the provision, it has to be aware of the case. Either the individual will report it to the agency or the agency will discover these events through other means of supervision that they carry under their mandate. Once they have the information, they can ascertain the facts, like they do for any investigation or inquiry, and then make a decision based on them.

4:20 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

Am I right to say there's no protection in the legislation for the employee? There could be penalties against that bank, but there would be no protection for the employee to actually have their job given back to them.

November 5th, 2018 / 4:20 p.m.

Director, Consumer Affairs, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance

Jean-François Girard

One aspect of the proposal is for the commissioner to be able to direct actions to the bank to become onside of a breach. In this case you're describing a breach of these sections. If they have laid off a person, that would be a breach of that section and they could use different parts of the act to direct action that would potentially reinstate that person.

4:20 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

Good, thank you.

I want to move to another section, proposed subparagraph 627.17(1)(a)(i), on page 256, which talks about retail deposit accounts. This is an important issue in my riding because of the incredible cost of housing. We're seeing a lot of people out on the street and they are redlined. They're basically not able to access traditional banking facilities. They end up getting payday loans and they get ripped off and it starts a very vicious debt circle that has real consequences for them.

I'm interested in the retail deposit accounts provisions of the act. It says, “presents to the member bank two documents from a reliable source”, and then there is a listing of what would be considered a reliable source. However, what is not listed are homeless shelters. In my riding, for example, would the Union Gospel Mission, the Progressive Housing Society or the Lookout Housing and Health Society be able to provide documents that would be considered, under the act, to have come from a reliable source? Would they then allow that person access to banking services that they're currently unable to access?

4:20 p.m.

Director, Consumer Affairs, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance

Jean-François Girard

This set of provisions requires one document, so it could be a statement of benefit, and somebody in the organization that you mentioned could vouch for the identity of the person. It really streamlined the process, but you do need at least one document that would tell who you are.

4:20 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

You're referencing that the person’s identity could also be confirmed by a “natural person of good standing in the community where the point of service or branch”.

4:20 p.m.

Director, Consumer Affairs, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance

4:20 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

Those are the provisions. Thank you very much for that.

In terms of exemptions for branch closure, particularly in rural areas where there is no other financial institution, there's a six-month notice written in for notice of branch closure. It does provide though, under proposed section 627.994 that, “the Commissioner may, on the request of a member bank, exempt it from the requirement to give a notice” or “vary the time and manner in which such a notice is required to be given.”

Does that not water down the provisions that are included in the act forcing written notice?

4:20 p.m.

Director General, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance

Eleanor Ryan

Perhaps I could begin.

4:20 p.m.

Liberal

The Chair Liberal Wayne Easter

What was that again, Peter?

4:20 p.m.

NDP

Peter Julian NDP New Westminster—Burnaby, BC

It was proposed section 627.994 on page 297 of the 850-page budget implementation act, the biggest omnibus legislation we have faced.

4:20 p.m.

Liberal

The Chair Liberal Wayne Easter

Okay, I have it, and you made that point before.

Go ahead, Ms. Ryan.

4:20 p.m.

Director General, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance

Eleanor Ryan

Perhaps I might begin by saying these provisions dealing with branch closures are consolidated from the existing legislation. There are no fundamental changes to this part.

What I can do here is turn to my colleague Brigitte Goulard, who can discuss when the commissioner has used this power, and indeed, how the FCAC deals with a branch closure regime.

4:25 p.m.

Deputy Commissionner, Financial Consumer Agency of Canada

Brigitte Goulard

We get more and more notices of branch closures as time goes by, and in January 2016, we issued a new guidance tool to the banks on how to hold community consultations with the public and their customers to ensure that the customers are very well aware of the branch closures. When those guidelines are not followed, the public can make a request for us to direct the bank to hold a meeting with the community. We're happy to say that the guidance document has had a very positive impact in the sense that the banks comply very well with the guidance and that we have seen the banks consult with the community.

Obviously, we are not in a position to tell the bank not to close the branch, but we are confident that the appropriate consultations are taking place within each community.

4:25 p.m.

Liberal

The Chair Liberal Wayne Easter

We have Mr. Fragiskatos and then Mr. Sorbara.

4:25 p.m.

London North Centre, Lib.

Peter Fragiskatos

Thank you very much.

Thank you for being here.

I have a question with respect to the whistle-blowing amendments that have been made and also the changes that have been made for the complaints handling bodies. What was the situation prior to these changes being brought into effect? Did we have anything close to whistle-blowing? Did we have anything close to a mechanism that would require independent complaints-handling bodies to publish a rationale?