Finance Committee on May 30th, 2024

[The Chair, Liberal, Peter Fonseca]

Thank you, Monsieur Lambert. I'm sure there are going to be many questions.

Now we'll go to Wealthsimple with Ms. Oliver.

[Jessica Oliver, Head, Government and Regulatory Relations, Wealthsimple Investment Inc.]

Thank you, Mr. Chair.

Thanks to the committee for this invitation.

My name is Jessica Oliver. I'm head of government and regulatory affairs at Wealthsimple, a financial services company trusted by over three million Canadians, including one in five adults under 40. I'm privileged to work with over 1,000 colleagues across the country.

Our mission is to help Canadians reach their financial goals. We started 10 years ago with a single product and a straightforward regulatory framework. We offered low-cost managed investing, which means clients describe their financial circumstances and goals, and our team manages their investments to achieve those goals.

Over time, we've added other products, including commission-free self-directed investment. We offer fee-optional tax filing that this year was used to “netfile” more than 1.7 million returns, the majority for free. We offer Canada's highest-interest chequing account with no monthly fees or minimum balances. In the last year, our clients have earned more than $100 million in interest in these accounts.

We saw incredible uptake when we launched the first home savings account. From August to December, more than 200,000 Canadians started saving for home ownership with a Wealthsimple FHSA, which is, to our knowledge, more than 30% of all FHSAs. Our total accounts are now over 250,000.

I'm pleased to join you as you consider the budget implementation act. I'd like to touch on the bill's action on consumer-driven banking, financial fees and the Canada learning bond.

The bill lays the legislative foundation for consumer-driven banking, also known as open banking, which will provide a secure and simple way for Canadians to share their financial data between providers, making it easier for them to access and integrate the financial products that suit them best. Here's what that really means. Consumer-driven banking can help a homeowner lower their mortgage rate by proving they have a pension. It can help renters build their credit score by proving they pay on time. It can help newcomers build credit by incorporating financial data from their countries of origin. In fact, the Financial Services Regulatory Authority of Ontario, FSRA, has identified consumer-driven banking as the biggest potential driver of innovation in mortgage brokering. According to StatsCan, Canadian households pay $694 per year for financial services. We believe they deserve lower costs, more convenience, less friction and ultimately more control over their own money.

Consumer-driven banking is one piece of a broader fundamental need to enable competition on a level playing field. Our financial infrastructure lags behind that of all of our G7 peers, and it has for decades. Wealthsimple has been a part of the consultation process and will continue to work with Finance Canada and the FCAC to inform the implementation of open banking and make sure our business is ready for our clients to benefit.

It's also important to acknowledge that open banking is not a silver bullet for the competition problem in Canadian financial services. Financial regulators, both federal and provincial, should be explicitly mandated to deliver competition in their respective industries, just as their counterparts in the U.S., U.K. and Australia are. Financial regulators point to the Competition Bureau, which for all of its good work, does not have the resources or the mandate to take on this role alone. Its advisory recommendations to financial sector regulators are only suggestions and are typically ignored.

With respect to fees, regulators should also take a closer look at where Canadians are being charged fees for financial services without a reasonable connection to the actual cost of the service. Right now, Canadians who move an investment account like a TFSA from one financial institution to another pay up to $250 for the privilege of moving their own money. The actual cost of that transfer, if processed through widely available automated systems, is less than a dollar. There is no justification for that, and it is a transparent attempt to prevent Canadians from making a free choice of their financial provider. The federal budget has committed to working with provinces to tackle junk fees in a range of areas, and in our view, this should be near the top of the list.

Finally, in addition to our products, we established the Wealthsimple Foundation, which increases awareness of and participation in RESPs and the Canada learning bond. We were pleased to see a commitment for the auto-enrolment of eligible children in the Canada learning bond. It's the right thing to do. It means the Wealthsimple Foundation will be in need of a new mission and mandate, and we're thrilled about that opportunity.

To conclude, the measures for consumer-driven banking are welcome, but they are a start, not the end. There is much more to do to create a truly competitive financial services sector, starting from the first principles of how it's regulated and what we want it to deliver for Canadians.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Oliver.

What a diverse group of witnesses we have with us. I'm sure there will be many questions in our first round. We're starting with six minutes for each party.

MP Chambers will be going first.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much, Mr. Chair.

Welcome to our witnesses.

Ms. Norman, we just had a great panel, and we talked with representatives from the diabetes community, who talked about the pharmacare legislation. I want to pick up on a couple of things there. Obviously I'm not as steeped in the subject matter, so I hope you can help me understand a few things.

You referenced the Affordable Care Act in the U.S. as a positive example of coverage for contraceptives. Is that correct?

[Wendy V. Norman]

Yes. I referenced an analysis of the way the act was implemented in the first three years.

[Adam Chambers, Conservative, Simcoe North, ON]

That's not universal single-payer, though. Is that correct?

[Wendy V. Norman]

The act as it was first implemented—and not the way it is right now—to my understanding was providing single-payer coverage for the majority of the population.

[Adam Chambers, Conservative, Simcoe North, ON]

Okay, but it's not universal. It does not cover every American; it covers those who are part of the plan. Is that correct?

[Wendy V. Norman]

I would have to go back and recheck that.

[Adam Chambers, Conservative, Simcoe North, ON]

You referenced British Columbia as having single-payer universal coverage for contraceptives. Is that correct?

[Wendy V. Norman]

That started in April 2023.

[Adam Chambers, Conservative, Simcoe North, ON]

If British Columbia has single-payer universal coverage for contraceptives, why would the federal government have to pay British Columbia to do that program?

[Wendy V. Norman]

My understanding is that the federal government would like a program that's implemented across all of Canada and would like all provinces to participate in providing this service. All provinces currently provide some component of their population with some coverage. At the moment, British Columbia has the most coverage, but the federal coverage, as I understand it, will be evening this across the country. You are the federal government here. You will decide how you implement your agreements with each provincial system.

[Adam Chambers, Conservative, Simcoe North, ON]

If a province has shown an ability to do this, wouldn't it be up to the voters in a province to vote for a government that wants to implement single-payer universal coverage in a province, where the jurisdictional responsibility lies?

[Wendy V. Norman]

What you're asking me is a Canada Health Act question: Do we have universal principles with respect to how we deliver health care in Canada so that people in every province have an equitable chance to achieve their own goals for their health and for their health equity? Are people within Canada able to move between one province and another for their education or work and have coverage where they need it that is similar across the country? I think you're asking me questions about the way the federal government would implement its discussions with provinces, if I understand you correctly, MP Chambers.

[Adam Chambers, Conservative, Simcoe North, ON]

You are very correct.

Is the current proposed formulary completely exhaustive of all contraceptives that are on the market today?

[Wendy V. Norman]

The formulary that was proposed for the federal government, to my understanding, was designed to be the same as or very similar to what was implemented in B.C. In B.C., this formulary covers contraception in nearly every category. One category is excluded, where there are questions of health risk implications that are higher than others. However, it is for all of the typically accessed contraceptive methods with a range of choices within each category.

[Adam Chambers, Conservative, Simcoe North, ON]

We live in a world of scarcity. You touched on the fill-the-gaps model or a universal single-payer model. With what we are being asked to approve, is the trade-off not that we could add more drugs or coverage for other ailments in a national plan if we covered only those people who do not have coverage today versus covering everyone who's already covered under a private plan, which is what the government is currently proposing?

[Wendy V. Norman]

Well, the interesting thing to consider here, particularly in the case of contraception, is the health and societal implications from the costs of not providing prevention of unintended pregnancy. There are implications for families, society, education and our economics from the downstream effects of unintended pregnancies in our society versus prevention.

We know that fill-the-gaps coverage for contraceptives is not an effective mechanism because many people who are considered to have coverage are not able to access it for their contraceptives. Those who are most fertile and require contraceptives are the least likely to have access to those kinds of plans. For example, in Ontario—

[Adam Chambers, Conservative, Simcoe North, ON]

I'm sorry, but I have to jump in there. I'm going to get cut off by the chair.

I have one final question.

[The Chair, Liberal, Peter Fonseca]

Be really quick.

[Adam Chambers, Conservative, Simcoe North, ON]

Why do you have to go to a doctor? Shouldn't some of these contraceptives be offered over the counter, as they are in some jurisdictions? We have five million to seven million Canadians without a family doctor.

[Wendy V. Norman]

You don't have to go to a doctor for contraceptives. You can see a nurse practitioner. You can see a midwife. In many provinces, you can see a public health nurse. In seven provinces across Canada, you can walk into your pharmacy and have a private discussion with your pharmacist. The pharmacist can prescribe any contraceptive method for you.

This is one of the ways that Canada is leading the world in advancing primary care access. It's by upscaling the abilities of a wide range of primary health care providers to serve the needs to prevent unintended pregnancy.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you very much.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers.

Now we go to MP Thompson.