Finance Committee on Nov. 17th, 2016

[The Chair, Liberal, Wayne Easter]

Mr. Albas is next, and then Mr. Caron.

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

Thank you, Mr. Chair, and thank you to our witnesses here today for the work they do for Canadians.

In regard to this conversation, going back to Summerland Credit Union, one of the staff mentioned this point. I raised it with Minister Flaherty, who at the time looked at it and then eventually came back and took action with regulations and so on.

Maybe, Ms. Ryan, you can lend some clarification on this subject. Parliament has already delegated the authority to the Minister of Finance. The Minister of Finance used his delegation power at the time to put in the regulations.

I do know that one thing regulations offer is flexibility if there are changes or circumstances that allow for it to be changed, so when we go back now and put it back into the actual law, that cements it much more and reduces the flexibility of the bureaucracy or the minister to be able to respond.

What I see from what you said is there's not going to be that much difference that Canadians will notice. Second, to me it actually takes away the flexibility of the Minister of Finance to be able to clarify things in a timely basis.

Can you confirm whether or not that's the case?

[Eleanor Ryan]

You are absolutely correct that there are, indeed, currently regulations on prepaid cards. What this provision does is move the key standard—the requirement that cards not expire—from the regulations into the legislation. There continues to be authority within the act to fine-tune requirements. There is a comprehensive regulation-making authority in section 627.96. Where there is a need to fine-tune it, the government does still have the authority to do that.

The advantage of this approach is it ensures that consumers can actually see the key standards in the legislation that protect them.

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

Okay, but whether someone looks at a regulatory piece of information or a statute, both have the force of law behind them. Is that not correct? Most people will go on a website, and they will want to see just the basic outlines of what they can expect. CRTC does this all the time. For the anti-spam legislation, we don't expect people to be able to comprehend the myriad of regulations under those regulations, because it's quite considerable.

I don't see the added value. To me, it actually removes the flexibility of the minister. Maybe that's a good thing, Mr. Chair.

Now I'll go to the preamble.

Mr. Campbell, you mentioned there were going to be additions to the preamble of the Bank Act.

[Glenn Campbell]

There are three types of amendments that are being made to move forward on the exclusivity provisions in the bill. There's a minor amendment to the preamble. There's an addition to the purpose clause about the intent of what the provisions are meant to cover. Then we are adding a paramountcy clause, as I mentioned in my opening remarks. There are minor changes to each of those that we call “the 3P approach” for implementing the exclusivity provisions in the Bank Act.

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

Usually preambles are not included in the final legislation, so what is the utility?

[Glenn Campbell]

The preamble in this case already exists in the act, and it basically just provides more clarity on the intent of the act.

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

Will the judiciary recognize a preamble in a piece of legislation for the purpose of clarifying the case if someone brings it to a court of law?

[Glenn Campbell]

I think the key provision here is the paramountcy provision, which is an enforceable provision in the legislation. I think the purpose clause, and in turn the preamble, provide more clarity. Not being a lawyer, I can't speak for the Department of Justice on that issue before the courts, but that is the intent. It is that a preamble and a purpose clause provide clarity, and then the paramountcy clause is the specific provision that really matters in this case.

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

I appreciate your expertise, both of you. Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much.

Go ahead, Mr. Caron.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

First, I have a quick question. Would this apply to credit unions that would be federally regulated?

[Glenn Campbell]

Yes, it would.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Merci.

The other question I have is once again about the lack of clarity or the arbitrary nature of certain definitions.

Reading this, I can see that it would require the bank to make available low-cost or no-cost options, without really defining what that means. “No cost” is pretty clear, but what does “low cost” mean? It's not clear.

The other notion that I can't really find a clear definition on is that it provides for limits on the length of time that the bank can hold funds deposited by cheque, but once again it doesn't say how much or for how long.

[Glenn Campbell]

If I may answer, this goes back to the question that the previous member had. For a number of provisions that were previously in regulations, the main tenet was brought into legislation to provide a comprehensive view of all the consumer protections for Canadians. There are still regulations required, and in turn guidance that will come from the regulator, given the continuous changing nature, to the point the member made earlier.

This is an area that needs specific guidance, either in regulations or with the regulator, to make more specific what those terms mean. We will consult with the industry in that regard. It is difficult to put these specific provisions in the legislation for the very reason we just talked about at the committee.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Were they clearly defined in the regulations previously? Are we going to keep the same terms in the regulations that we will be following?

[Eleanor Ryan]

The times for dealing with the holding of funds were set indeed, and there is an intention to set those amounts. The legislation sets the number of days that the funds can be held. They must be released, for instance, within four days, but the amount of the cheque would be prescribed.

[The Chair, Liberal, Wayne Easter]

Thank you all.

Are you...? Oh, sorry; go ahead.

[Jean-François Girard, Chief, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance]

You mentioned a definition of low-cost accounts compared to no-cost accounts. Currently, as Ms. Ryan explained a few minutes ago, this is subject to an agreement under which financial institutions are committed to providing accounts.

When we say “no-fee”, it's free, and “low-fee” is $4. The bill gives the government the authority to establish regulations that could replace the existing voluntary agreement.

There is no proposal to define the specific features of a low-cost account because it is currently defined under this agreement. However, if the government decided to adopt regulations, it would replace this agreement, and the specific costs could be defined in the regulations.

[The Chair, Liberal, Wayne Easter]

Thank you, all three, and we are sorry for holding you a little late.

Mr. van Raalte, on division 4, the Canada Disability Savings Act, the floor is yours.

[James van Raalte, Director General, Office for Disability Issues, Department of Human Resources and Skills Development]

Thank you, Mr. Chair.

Division 4 proposes consequential amendments to the Canada Disability Savings Act as a result of the introduction of the Canada child benefit in Budget 2016.

Eligibility for the low-income Canada disability savings bond was originally pegged to the family income threshold of the former Canada child tax benefit, which is currently set at $26,364. The amendment will now peg that family income threshold against the new Canada child benefit at $30,000.

As a result, in 2017 it is estimated that approximately 14,700 registered disability savings plan beneficiaries will benefit from this change, with an average increase in Canada disability savings bond payments of $87 in that year, for an increase in statutory payments of $1.28 million.

[The Chair, Liberal, Wayne Easter]

Are there any questions on division 4?

Go ahead, Ms. O'Connell.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you.

Your explanation answered some of my questions. Essentially, the changes as I read them are just the change in terminology from “child tax benefit” to “Canada child benefit” and then in that calculation formula, that increase.

Are you aware whether this would have any implications on provincial disability tax credits? Is it completely separate?

[James van Raalte]

No, it would not, Mr. Chair.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you.