Finance Committee on July 7th, 2020

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Good. Thanks for that.

In your report, you looked at some other jurisdictions, including Australia, the United Kingdom, the United States and the Netherlands. The standard in Canada in terms of resolution of complaints is 90 days. You note that out of the six banks, that standard is not being met. In some cases, it's not being met by quite a significant number of additional days, double the time or more, in terms of an average.

Your report notes that the 90-day standard is double that of Australia, double that of the United Kingdom, and that the counting of the 90-day period excludes the first step, whereas the first step is typically included in some of those other comparator jurisdictions.

What about the Netherlands and the United States? How do we compare in that regard?

[Judith Robertson]

I'm sorry. I was prepared to answer a different question. I honestly do not know. On the Netherlands, I don't know. We'd certainly be able to provide that information to you.

There are two points. First of all, those results are not satisfactory. They're very concerning, and these are issues I have raised at the most senior levels of the banks in the strongest possible ways.

I will say, though, that of course our report deals with a point in time. I would say that if we were to do the report again, based on current...we would expect to see improvements, because banks have been paying attention to this. It is important that they do so, because we anticipate a wave of complaints, which follows every crisis, so it's very critical that the industry get its complaint-handling processes in order, so that consumers can be treated fairly.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Fair enough.

[The Chair, Liberal, Wayne Easter]

We'll have to move on, Michael, sorry.

Mr. Fragiskatos, you have four minutes to wrap it up.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you, Ms. Robertson. That is very important information, particularly on payday loans. I'm not going to focus on that specifically, and my colleagues have done a great job in helping raise key questions.

I just want confirmation from you that payday loans and matters relating to them, including, most importantly, how they operate, all the way down to the rates of interest, those issues are regulated provincially, first and foremost, and to an extent, depending on the province, at the municipal level through bylaws. Is that correct?

[Judith Robertson]

That's my understanding, yes.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Okay. At the federal level, is there any regulatory role or not?

[Judith Robertson]

It's hard for me to be completely categorical, but certainly the FCAC plays no role.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Okay.

I also want to ask about financial literacy, since this is one of the main focuses of the agency. What does “financial literacy” mean in 2020, from your perspective? That's a term that's thrown around and that has been thrown around for many years. I know you've made a specific focus on young people, helping them become financially literate. I can tell you that when I was in high school, in the late 1990s and early 2000s, financial literacy meant something entirely different. When the good teachers at South Huron District High School helped me understand as a grade 9 student how to write a cheque, or something like that, that qualified then, in 1996, as an example of being financially literate. In 2020, it's a whole different ball game.

Can you give the committee an understanding of what financial literacy means today, from your perspective and from the perspective, obviously, of the agency?

[Judith Robertson]

It's a good question. We define financial literacy as the knowledge, skills and confidence to manage your financial affairs appropriately. Of course, that will mean different things at different stages of your life. Your example is actually not that far off. While it would be rare, I think, for anyone to teach someone how to write a cheque these days, it actually is appropriate to teach young people how to pay a bill online or how to manage their password information to keep their account secure. These are things that we as adults and sophisticated adults take for granted, but they do need their skills and they do need to be taught.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you very much for that, Ms. Robertson.

As a final question, I would just ask, in terms of financial literacy, what are the key points of focus for you and the agency going forward in the next few years? What issues do you think will be of paramount importance? In what ways might those issues involve COVID-19 and the economic response that's in motion and that will certainly continue?

[Judith Robertson]

Thinking about the two sides of our mandate, certainly the economic uncertainty and the economic stress created by COVID-19 put even more importance on our ability to assist Canadians in managing their financial affairs with knowledge and experience. Certainly what we're doing, as I mentioned before, in trying to shift from just awareness to actual tools and proactive behaviours seems to me to be on the right track. That's definitely a thrust.

On the supervisory and regulatory side, we have a full suite of priority areas to ensure that we are putting into effect the changes from the consumer protection framework so that consumers get the benefit of the protections embedded in the legislation. We have a full plate.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you.

[The Chair, Liberal, Wayne Easter]

With that, we will have to wrap it up.

On behalf of the committee, I want to thank you, Ms. Robertson, the witnesses who came with you today, and your whole team at the Financial Consumer Agency of Canada. These are strange and startling times, and they're creating scenarios that I don't think many of us expected to see in life, with people working from home. You have an important job to do, especially with the amount of money going out of the system and the loans that are coming through the banks, etc. You have important work to do, and we thank you for it.

Thank you for your appearance here today.

[Judith Robertson]

Thank you very much.

[The Chair, Liberal, Wayne Easter]

With that, we will suspend for about three minutes to bring up the next witness, who is with the Office of the Superintendent of Bankruptcy.

[The Chair, Liberal, Wayne Easter]

We will reconvene. For this two-hour session, we'll be meeting with the Office of the Superintendent of Bankruptcy and Ms. Elisabeth Lang, superintendent.

Before I turn to you, Ms. Lang, we'll officially call the meeting to order. I guess we had better do that or we won't be on the public system. For your information, Ms. Lang, we are meeting, as you know, on the COVID-19 pandemic and the government response to that. The meeting will be taking place by video conference, and the proceedings will be made available via the House of Commons website.

Before we get into your presentation, for those who are on the steering committee, which includes Peter Fragiskatos, Mr. Ste-Marie, Mr. Julian, and Mr. Poilievre, is anybody out of position such that they can't do a steering committee meeting this Thursday at three o'clock Ottawa time? We'd like to call that as quickly as possible so that it will give the clerk and staff enough time to get witnesses. If we're going to have four three-hour meetings before the end of July, we'll have to get on it pretty fast.

Are you okay with that?

[Peter Fragiskatos, Liberal, London North Centre, ON]

That sounds good, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

I don't see Mr. Poilievre or Mr. Julian.

[Pierre Poilievre, Conservative, Carleton, ON]

Yes, that should work.

[The Chair, Liberal, Wayne Easter]

All right. I know that Peter is in Ottawa, so as long as he's not on a plane or something at that time, we'll try for three o'clock.

Ms. May.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Chair, I happen to know that his plane is towards the evening. I can't speak for him, but at least I don't think....

[The Chair, Liberal, Wayne Easter]

Okay, so he shouldn't be on one at three o'clock Ottawa time. Thanks, Elizabeth.

With that, we will go ahead with that timing, Caroline.

I welcome Ms. Lang, from the Office of the Superintendent of Bankruptcy. She has an opening statement, and then we'll go to a round of questions.

Ms. Lang, thank you for coming.

[Elisabeth Lang, Superintendent, Office of the Superintendent of Bankruptcy]

Thank you for the invitation to appear before you today. I will deliver my remarks in English to avoid any technical difficulties, but I'd be more than happy to answer any questions posed in either English or French.

I want to express my thanks to each of you on this committee for the important work you do on behalf of Canadians, and I hope you and your families are staying safe and healthy.

Today I'll cover three topics. I'll start by providing information about the Office of the Superintendent of Bankruptcy, which I'll refer to as the OSB, and the Canadian insolvency system. As I highlight some of the OSB's programs, I'll provide you with an overview of the steps the OSB has taken in response to the COVID-19 pandemic. I will then address how the OSB is preparing for a possible increase in the number of insolvency filings.

Prior to appearing today, I provided a deck with information about the OSB and data on insolvency filings in Canada. I don't intend to walk you through that, but I am happy to answer any questions about it that you may have.

A well-functioning insolvency system is a key pillar of the economy. It helps to promote investor and creditor confidence in the Canadian marketplace. As superintendent, a Governor in Council appointee, I have statutory duties and authorities that help to ensure that the Canadian insolvency system continues to operate as intended, as set out in the material I provided.

[The Chair, Liberal, Wayne Easter]

Ms. Lang, I'll interrupt for a second and ask you to slow down a bit. Interpretation is even more difficult over video conference, so the people in the booths might be having a little trouble. Just slow down a little.