Finance Committee on Nov. 6th, 2018

[Philip Cross]

At the same time, it isn't just me. Even with a very low unemployment rate and the elimination of the government's deficit, it's the people of Quebec who chose to vote for change. So, why?

[Greg Fergus, Liberal, Hull—Aylmer, QC]

I don't dispute that, but you said—

[Philip Cross]

I agree that this government has done some good things.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Right. However, in your previous comments you didn't say that it had done good things. I believe you even indicated that it was reasonable to conclude that it was an incompetent government. But it seems that, fiscally speaking—

[Philip Cross]

No, no.

I mentioned the two governments, but I must say that I had Kathleen Wynne's government in mind. As I also said, the Couillard government has done some good things, but the people of Quebec have also decided that they want better.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

I never question the public's good judgment, but you said that the Couillard government was a government like any other. However, it wasn't. It managed the province's finances well and did an excellent job.

[Philip Cross]

That's a very good question.

As an economist, I'm aware that some models suggest that if we do this or that with the unemployment rate or the GDP, we'll get re-elected—

[Greg Fergus, Liberal, Hull—Aylmer, QC]

That has nothing to do with it.

[Philip Cross]

—and all of a sudden, it doesn't work. It hasn't worked in British Columbia or Quebec, and I don't know why.

[The Chair, Liberal, Wayne Easter]

We are a little off the budget implementation act, but it is a good discussion. We are just about at the end of this panel, in any event, but we will have to go to the vote.

There's another procedural motion....

Go ahead, Peter.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

I had one very quick question for Ms. Faraday.

[The Chair, Liberal, Wayne Easter]

If everybody is agreeable to stay for another five minutes, we can do that and go to your quick question. Mr. McLeod, I know, wanted to ask and didn't quite finish his line of questioning.

You go, then Mr. McLeod and then we're done.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you, Mr. Chair.

Very quickly, Ms. Faraday, how many sections of the bill need to be changed to make this bill actually do what it was intended to do? How many amendments need to be brought?

[Fay Faraday]

We say that there is a dirty dozen of amendments that need to be done. We will submit them to you in writing in terms of the specific amendments. They can be made quite surgically and I think there is time to get that done. I think they're necessary to get done.

I do want to emphasize that this is not just a matter of social policy, as has been characterized. This is actually fundamental human rights.

We've heard, “You have to wait until later.” The Supreme Court has told us that equality is central to building a strong economy and that to treat women as the shock absorbers of the economy is discriminatory. It's important to note that studies have shown, and the Ontario government and the federal pay equity task force have demonstrated, that closing the gender pay gap will boost the GDP significantly.

In Ontario, closing it would amount to a 2.5% increase to the GDP, which is the size of the entire auto sector and auto parts sector combined. That's from a report by Deloitte that was done to quantify what it means to fix the gender pay gap.

When we hear our friends saying that the sky will fall, the reality is that putting money in women's pockets, having an economy that works for all, actually boosts the economy. It is not a detriment. It's a matter of redistributing money, for sure, so that the emphasis is on people being able to support their lives, not profits.

[The Chair, Liberal, Wayne Easter]

We'll have to cut you there, Ms. Faraday. We have to take one more question.

Go ahead, Michael.

[Michael McLeod, Liberal, Northwest Territories, NT]

I had one last question I didn't get to ask Leona. It's about own-source revenues.

I hear all the time indigenous governments talking about, as they move towards self-governing situations and looking after their own people, that they need to have a mechanism to raise revenue. Is this change something that will benefit indigenous governments in terms of own-source revenues?

[Leona Irons]

Absolutely. Totally.

[The Chair, Liberal, Wayne Easter]

With that, thank you to all of the witnesses in this panel for the presentations you made and the exchanges we had, sometimes lively, but that's important too. Thank you for that.

To the second panel, we will be back right after the vote, but I understand there's another procedural vote after that. We'll see if we can get everybody on in terms of their presentations and see where we're at.

The meeting is suspended for now.

[The Chair, Liberal, Wayne Easter]

Okay, I think we'll call the meeting back to order.

We have panel two here. Sorry to disrupt the situation with votes.

As you know, we're studying the subject matter of Bill C-86, the budget implementation act, 2018, no. 2. We think we'll be able to hear from all the witnesses. Try to keep it to five minutes, if you could. It would be nice if we could get one round of questions in, at least one question from each of the parties.

The floor goes to Ms. Durdin, President and CEO, Canadian Credit Union Association.

Go ahead.

[Martha Durdin, President and Chief Executive Officer, Canadian Credit Union Association]

Thank you, Mr. Chair, and thank you, members of the committee for the invitation today.

My name is Martha Durdin, and I am the President and Chief Executive Officer of the Canadian Credit Union Association, the CCUA.

CCUA, our association represents 252 credit unions and caisses populaires outside of Quebec. Credit unions contribute $6.5 million to Canada's economy, providing deposit, loan and wealth management services to 5.7 million Canadians.

Collectively, credit unions in regional centrals employ more than 29,000 employees and manage $225 billion in assets.

As their name suggests, financial cooperatives are cooperatives, which means that they belong to the people who do business with them. Having to satisfy our member-owners rather than the major shareholders encourages us to provide unparalleled customer service.

This year, Canadians once again ranked credit unions ahead of the federal chartered banks for customer service excellence. It was the 13th year in a row.

For rural members on the committee, it is also important to note that in almost 400 communities across Canada, credit unions are the only providers of financial services to households and small businesses.

We would like to congratulate the government on the introduction of this bill, which contains many important consumer protection measures we have advocated for. We support the various measures aimed at enhancing consumer protection in the financial services industry, from naming institutions that run afoul of the regulations to increasing monetary penalties and enhancing whistle-blower protections.

Particularly, the new requirement for financial institutions to disclose the self-imposed codes of conduct that they have adopted is a positive step forward, representing as it does an acknowledgement by the government of the importance of self-imposed codes.

That brings us to us. In CCUA's pre-budget submission to this committee, our primary recommendation was government support for the self-imposed credit union industry market code of conduct currently under development by my organization and leaders of the credit union system. For members, this would be highly preferable to any new prescriptive regulations and would enhance consumer protection in financial services.

We're prepared to work with this committee and the government to establish this market code of conduct in a way that is consistent with the government's regulatory objectives and proportional and appropriate for our credit union sector, given the fundamental distinctions that exist between it and our players in the Canadian financial system.

As we head into the final phase of the review of the financial sector legislation ahead of 2019, we would urge the committee and the government to continue to take into account the specific regulatory needs of our sector, and to craft policy through the lens of a smaller financial institution with a view to enhancing competition.

Our submission to the finance department, as part of its ongoing financial institutions legislative review, included suggestions to improve the Bank Act provision for governing federal credit unions, which we hope will be addressed in the final round of reform next year. We recommend enacting a threshold of 500 members, or 1%, of a federal credit union's membership, for advancing special resolution proposals at an annual meeting of members; ensuring a federal credit union's membership list is protected; amending the Bank Act to only permit disclosure of a membership list to a third party as an intermediary to facilitate communication between a member and the broader membership; allowing electronic voting in advance of the federal credit union's AGM; and several other governance-related recommendations.

Our sector is strong and represents a key component of the Canadian financial system. In a market dominated by a small number of huge financial institutions, we represent the only real competition that exists in Canada. We need regulations and legislation that recognize the unique, important role we play. This bill helps us achieve this, but there is more work to be done.

Thank you for the opportunity to share our perspective. I look forward to your questions.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Martha.

We'll turn to Toby Sanger, from Canadians for Tax Fairness.

Mr. Sanger, the floor is yours.

[Toby Sanger, Executive Director, Canadians for Tax Fairness]

Chair and members, thank you very much for inviting us to discuss Bill C-86.

There are many positive initiatives in this bill that we are very supportive of, but we are concerned that too many seem half finished and are not fully developed.

We're glad to see the Canadian gender budgeting act initiative, but the proposed act is just two pages long and the legislation is very general. The reports and the analysis on gender and diversity impacts of the budget of tax expenditures and programs could be so vague and general as to be not particularly meaningful.

I'm also very glad to see legislation for climate action incentive payments to households introduced and the fact that the government is recycling carbon tax revenues in a progressive manner, which is something I've advocated for a decade. I'm very glad to see that. However, there's nothing in the legislation that sets the annual payment amounts or ties them to the revenues raised.

I'm also glad to see the poverty reduction act, but it may be one of the shortest acts ever. I counted up the words. I think there are 51 words. It identifies aspirational targets on poverty reduction, but no definition of poverty. I know the government has a definition of poverty, but it would be good to introduce some of this into the legislation.

At the same time, Bill C-86 includes many amendments to a wide range of taxation and financial industry legislation. These are complicated areas with significant implications and should be accorded adequate time for review.

We appreciate the targeted amendments in part 1 to prevent aggressive international corporate tax avoidance in specific circumstances, but we will also need additional far-reaching measures to reduce aggressive tax avoidance and evasion.

The bill includes 65 pages with amendments to the Bank Act and related acts on financial consumer protection. The issue of protection of financial consumer information is certainly in the news and a reasoned discussion on these issues would certainly be welcome. This section of the bill also includes a provision for the protection of whistle-blowing. One concern is that the definition of “wrongdoing” in this section may be too narrow and just applying to contraventions of the Bank Act and bank policies. There doesn't seem to be any guarantee of follow-up with these reports.

Bill C-86 also includes corrections to previous omnibus budget bills. This indicates to me to a certain extent that pushing through large omnibus bills without sufficient due consideration isn't a wise thing to do, because mistakes can be made.

As you may know, Canada has the weakest corporate transparency regime among the G20 and this makes us a haven for money laundering and tax evasion. I'm glad that this government appreciates the importance of having a registry of individuals with significant control of corporate entities to help prevent money laundering and other criminal activities. However, on pages 134 to 139 of the bill, the amendments to the Canada Business Corporations Act seem too limited and restrictive at this stage. The provisions in this section would result in information that isn't adequate, that could be unreliable because there aren't requirements for verification and may not be timely enough for law investigation and enforcement provisions.

Instead, the legislation should explicitly require corporations to make access available to reporting entities and other parties that require it for regulatory, legal and enforcement purposes—and I believe the committee is going to be reviewing the proceeds of crime legislation, or a report, later. There should be a provision for summary indictable offences and fines, not just criminal convictions. The registry framework also needs to be digital forward to increase efficiency and reduce the costs of compliance. Ultimately, we need a central public registry of beneficial owners for all corporate entities as has been established in the U.K.

In summary, there are a lot of positive and worthwhile initiatives in this bill, but our concern is that a lot has been crammed into one piece of legislation without enough time for reasoned review by the legislature and experts. We'd like to provide some more detailed submissions, maybe, to the committee on specific changes in particular to the Canada Business Corporations Act, if that's possible, later.

Thank you.

[The Chair, Liberal, Wayne Easter]

If you have any further information, send it to the clerk. There is a fairly tight time frame on this one, Mr. Sanger. The committee hopes to table the money laundering report on Thursday of this week.

We'll turn then to Equal Voice and Nancy Peckford, Executive Director. Welcome, Ms. Peckford.

[Nancy Peckford, National Spokesperson and Executive Director, Equal Voice]

Thank you so much for the opportunity to be here.

As many of you know, Equal Voice is a multipartisan national organization almost exclusively devoted to the election of more women to all levels of government. To that end, it is very unusual for us to weigh in on matters of policy, but because of the creation of a unique mechanism or mechanisms as per the bill that you are currently studying, we felt it was appropriate to take a few minutes to share our analyses.

There is no doubt that for many years the House of Commons Standing Committee on the Status of Women, both under the current government and past governments, have taken a hard look at how to better equip the federal public service, and I think governments in general, to advance the gender equality agenda.

I was part of a seminal research study about 10 years ago, led by a different government, where a unanimous report was created and advanced to look at gender equality budget mechanisms as well as providing autonomy and more strength to our current department, the Status of Women Canada.

Obviously, those discussions, combined with a gender-parity cabinet among other things, have led you all to ensure that this budget will produce an independent department that will equip the Status of Women under a different name and with a strengthened mandate to deliver on some key priorities for Canadians.

I caught some of the last round of debate and I wanted to read into the record why I think it's so important that we ensure that the Government of Canada is well equipped to advance gender equality. I know that some people are stressed about expenditures that may appear to be frivolous but are the contrary.

To give you two examples with the limited time I have: investments in women in leadership and investments in gender budgeting. These are conversations that, as an advocate in this sector for 15 years, I have had across party lines. In my view these are not partisan investments. They are good sense investments.

A widely cited McKinsey Global Institute study suggests closing the gender gap in women and leadership generally but particularly in the labour force. That means ensuring that women can work to the degree they wish to in a full-time capacity and also that the composition of employment generally is gender-balanced. This would add 12% to 25% of global GDP by 2025.

That means huge gains to our economy by ensuring that governments across the globe are partners with the private sector in advancing women in leadership, not just in the labour force but in society in general. That's the combined economies of China and the U.S. alone, so major dividends are to be gained here.

The other thing that's interesting is that when I was doing a little research, a growing body of research documents the many ways that women contribute value to each link of the business value chain as suppliers, leaders, employees, customers, brand creators and community members. Again, I think that's a really important reflection as you move forward with this bill.

Finally, a group of academics, both women and men, wanted to put their heads together around trying to monetize what happens when you have a critical mass of women participating in the corporate sector. They found that when women comprise a significant proportion of female executives or female board members you see the greatest advancements.

That's important because it juxtaposes findings where if you had a female CEO and a largely male-led executive body, those gains were not as significant and in some cases were negligible. They did not produce in the ways we might anticipate.

All of this is to say that obviously from Equal Voice's perspective, closing the women-in-leadership gap across society, both within our economy and other key leadership sectors, is critically important. I think the mechanisms that are introduced as part of this bill are really meaningful and a great leap forward and are the culmination of discussions that have been ongoing in this sector for decades now.

I salute what I hope is common ground here in advancing this piece of the legislation because I think women on all sides, regardless of partisan orientation or where they're located, see the value we all want as Canadians. I'll leave it there.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Nancy.

We now have, with Imagine Canada, Mr. Schaper, Director of Public Policy.

Go ahead.