Thank you, Mr. Chair.
My name is Bernard Brun, and I'm here on behalf of Desjardins Group.
I'd like to thank the committee for the opportunity to share our input today and contribute to the prebudget consultations in advance of the 2017 federal budget.
It is especially lovely for us to be here, in Quebec City, given the tremendously important role of Desjardins among financial institutions and services in the capital and around the province.
Desjardins Group is the country's leading financial co-operative group, and the sixth in the world. Today, its assets total more than $260 billion, and it has some 47,000 employees working to serve seven million members and clients.
The Bloomberg news agency ranked Desjardins Group as the most solid financial institution in North America, with some of the best capital ratios and credit ratings in the industry.
I am going to pick up on some of the elements contained in our previous brief to the committee.
In particular, I want to highlight the distinct co-operative dimension that sets Desjardins Group apart from other financial institutions, as well as the regulatory impacts and issues it gives rise to at the provincial and federal levels.
Financial co-operatives differ from traditional banks by virtue of their mission and their democratic structure. Because of this special relationship with members, we can attest to the fact that, in addition to contributing to Canada's financial system, financial co-operatives represent an additional vector of economic stability and regional prosperity. For example, 30% of Desjardins Group's points of service are located in sparsely populated areas, with fewer than 2,000 inhabitants.
That brings me to my first point.
We would like to stress to the committee members the importance of consistent rules governing financial institutions.
Quebec's provincial regulator, the Autorité des marchés financiers, designated Desjardins Group a domestic systemically important financial institution. At the end of the day, Desjardins Group is a leader in Quebec and Canada alike. The rules that governments put in place, particularly at the federal level, affect all financial institutions no matter where they are headquartered, as well as the taxpayers and citizens they serve.
We are asking committee members and the government to recognize that any measures governing financial institutions must be adapted to the co-operative model, which is clearly not the prevailing model in the financial institution industry. That is especially important in light of the federal government's current review of the regulatory framework governing financial institutions.
The second point I'd like to discuss, which relates more to the economy, is a hot topic right now and one that concerns many in the government and financial sector. I am talking about household debt and the measures related to the housing market.
It is fair to say that household debt is worrisome on a number of levels. Steps must be taken. Just recently, the federal finance minister announced that measures would be put in place. Despite being well-received, these measures will have a clear impact on access to housing; the extent of that impact, however, is still not fully known.
Regional disparities exist within the housing market, particularly in a country like Canada. It is important to keep that in mind, and I urge the committee members to consider that element carefully. Educating the government on this point is key. It is not advisable to introduce uniform standards across the country, given that the overheated market is limited to certain geographic areas and certain types of housing.
Furthermore, it is recommended that the government take a step back in order to fully assess the impact of the recently introduced measures before proposing new ones.
Addressing household debt through the financial sector requires a very delicate hand given the interrelationship with economic growth and interest rates. The government must exercise the utmost caution in its cost-benefit analysis in order to achieve a so-called smooth landing for the entire Canadian economy.
I would just like to wrap up by, once again, urging the government to fully recognize the characteristics, specific needs, and benefits of the financial co-operative system. The government must also recognize that Desjardins Group and the rest of the country's financial co-operatives are an important and integral part of the Canadian financial system and that the rules need to be adapted accordingly.
Thank you.