Finance Committee on June 4th, 2024

[The Chair, Liberal, Peter Fonseca]

We'll have recorded vote, please.

(Clause 17 agreed to: yeas 10; nays 1)

Now we will go to our next grouping, which is clauses 18 to 36.

(Clauses 18 to 36 inclusive agreed to on division)

(On clause 37)

[The Chair, Liberal, Peter Fonseca]

Go ahead, MP Ste-Marie.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

This is a long clause in Bill C-69 that creates the tax credit for clean hydrogen. In fact, when we look at the details of this clause, we see that it is a made-to-measure subsidy for the oil and gas industry, the gas industry, to produce hydrogen. In our opinion, this is not a transition plan; it is a plan to support an industry composed of corporations that are already extremely profitable and simply pay their profits to their shareholders. We think the purpose of a transition plan is not to subsidize the gas industry, including the hydrogen industry, in this case.

I am therefore asking for a roll-call vote. I am going to vote against this clause, and I urge my colleagues to do the same.

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

How would you like to—

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Chair. As I said, I am asking for a roll-call vote.

[The Chair, Liberal, Peter Fonseca]

Could we have a recorded vote, please?

(Clause 37 agreed to: yeas 9; nays 1)

On clause 38, there's amendment CPC-1. Would you like to move that?

[An hon. member]

Yes.

[The Chair, Liberal, Peter Fonseca]

I do have a ruling, members.

Bill C-69 seeks to amend the Income Tax Act by providing a refundable tax credit for certain activities related to clean technology manufacturing property. The amendment attempts to add to the list of qualifying products by including equipment used for helium production, which would expand the tax credit provided in the bill.

As House of Commons Procedure and Practice, third edition, states on page 772, “Since an amendment may not infringe upon the financial—

[Ryan Turnbull, Liberal, Whitby, ON]

I have a point of order.

I apologize for interrupting you, Chair, but my understanding was that we were still saving all of the amended clauses for after. This is a change to the process, which we just agreed on. I felt as though we finally got there in terms of our process, and then we jumped into an amended clause.

[The Chair, Liberal, Peter Fonseca]

Thank you, PS Turnbull.

We will go back, and we will come back to clause 38.

(On clause 39)

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

Clauses 38 and 39 relate to the clean technology investment tax credit, which is in fact another subsidy for the oil and gas industry. These corporations do not need subsidies. They are extremely profitable. The transition plan should not include more subsidies for oil companies.

I am therefore asking for a roll-call vote and I am going to vote against this clause.

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

We will have a recorded vote on clause 39.

(Clause 39 agreed to: yeas 7; nays 4)

Now we're grouping clauses 40 to 79.... I'll go to the members. Shall I group clauses 40 to 196? No.

Okay. I'll read each of them. Members, let me know.

The group includes clauses 40 to 79, 81 to 112, 117 to 122, 125, 126 to 130, 131 to 146, 148 to 155, 159 and 161 to 196.

(Clauses 40 to 79, 81 to 112, 117 to 122, 125, 126 to 130, 131 to 146, 148 to 155, 159 and 161 to 196 agreed to on division)

Thank you for that.

To our legislative clerks who put that all together so quickly, thank you.

We now start with debate on clause 197. I believe that is the next clause you referred to, MP Ste-Marie.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Yes, exactly.

[The Chair, Liberal, Peter Fonseca]

We are on clause 197.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Chair, division 16 creates the skeleton of the consumer-driven banking services project, or open banking system. This division consists of clauses 197 to 227. There are several proposed amendments to some of those clauses. I propose that we vote now on the ones on which no amendment is proposed, and I would ask my colleagues to vote against them.

[The Chair, Liberal, Peter Fonseca]

MP Ste-Marie, I'm sorry, but I'm going to have to interject. I just have to go to the legislative clerks. There may be....

There is already an amendment on clause 197, so we will get there when we go to all the clauses with amendments.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

In this case, is there a proposal to amend clause 198? Yes, there is.

[The Chair, Liberal, Peter Fonseca]

No. The next one without an amendment is clause 199.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Exactly.

I will continue where I left off.

I would ask the members of the committee to vote against this entire division.

It is important that the government legislate concerning the open banking system. We have been waiting years for this legislation, because it is necessary. Business is being done without proper legislation.

The time the government has taken to pass legislation is deplorable. The provisions of the budget implementation bill tabled this spring are not definitive. The government tells us that division 16 represents the skeleton, the infrastructure of the law, and all the details will be coming in the fall.

When we look at the skeleton, however, the infrastructure of the framework being proposed, we see that it has major problems in several respects. The government has not done its homework properly. If we adopt this structure, this base for the framework, we will be looking at major problems down the road.

I am asking the government to withdraw division 16, hold consultations, work on this bill over the summer, and come back in the fall with a more complete bill.

This division has multiple problems.

First, the choice to give the Financial Consumer Agency of Canada responsibility for the framework is a serious mistake. The group of agency representatives testified at the committee and demonstrated that they lack both understanding of and familiarity with the open banking system, as well as lacking expertise with that system.

This is not really a criticism, because this is not the fundamental role the agency should be playing. It would be much wiser, for example, to assign the management of this kind of framework to the Office of the Superintendent of Financial Institutions, which is already familiar with the ecosystem and the financial institutions, whether under federal or provincial jurisdiction, such as credit unions or the Alberta Treasury Branch financial institution, ATB Financial, which are under provincial jurisdiction.

The body responsible for the framework in the bill has no expertise at present for properly framing the act, and that expertise is not something that can be developed quickly. So there would be constant problems.

Second, the government has decided that management of the framework would be handled solely at the federal level. This would not be a shared jurisdiction in accordance with the division of powers. For example, consumer protection agencies are under provincial jurisdiction. However, under what is proposed in the bill, that would become a federal jurisdiction. Ottawa would be appropriating powers.

The officials clearly gave us to understand that if a financial institution under provincial jurisdiction, such as a financial co‑operative or a credit union, wanted to compete with the Bay Street banks, it would have to ask the province to waive its power to legislate about the open banking system in order for them to be under federal jurisdiction. The provinces will never agree to that. This would mean creating a two-tier open banking system. That would give the Bay Street banks a big advantage and put financial institutions under provincial jurisdiction at a big disadvantage. That is unacceptable.

Is this surprising? No. Every time the Department of Finance passes legislation concerning the banks, it always benefits the Bay Street banks at the expense of the other financial institutions. That is unacceptable. That is what is being proposed holus-bolus in the skeleton, in the structure, in the framework. This fall, it will be very complicated to unravel what is being done here right now.

Third, there are a lot of fuzzy points in the proposed measures, the framework. It will never work properly. Which one, the Autorité des marchés financiers or the Financial Consumer Agency of Canada, will be supervising it? The Financial Consumer Agency of Canada was not even able to answer that question.

We do not have the division of powers. In Quebec, the Consumer Protection Act is subject to the Civil Code, and it has been that way since the conquest. The central government and the Crown have always followed that law. Under what is being proposed, however, they would be exempted from it, and that would lead to very serious problems.

This job has been really badly done.

I am therefore asking the government to remove this division, do its homework, talk to its provincial counterparts, and hold consultations. That way, we would come back this fall with a better bill—in just a few short months from now.

We expected that the industry would be able to regulate, supervise and check what is done in terms of technological standards. However, the standards for the industry are going to be established by the Financial Consumer Agency of Canada. There are serious problems.

Mr. Williams, the member for Bay of Quinte, has done a lot of work in favour of the open financial market. He has actually introduced his own bill, one that my party and I could agree on.

In the case before us, a number of amendments on this subject have been proposed by the Conservatives. I believe this has been done in order to better reflect Mr. Williams' vision. However, all of this rests on a defective framework, a framework that presents significant problems and will never work properly, so I suggest that this division be rejected in its entirety. The same is true for the amendments, because the base will never work.

Colleagues, if we pass this division as it stands or is amended by the proposed amendments, there will be problems and discord and discontent. The regulatory body will not have the expertise it needs to do its work properly. We are going to have problems if there is a two-tier financial system. We are also going to have to backpedal in the fall or later.

If we reject this division and ask the government to redo its homework over the summer, we will avoid a lot of problems. Otherwise, there are going to be problems throughout the process until we end up backpedalling.

I therefore invite my colleagues to vote against this clause and all the clauses in division 16, out of respect for credit unions, financial co‑operatives and provincial jurisdictions and a concern for efficiency. That will mean we get a competent regulatory body that does not have to learn it all—it will take years to learn it all—and is able to talk to the agents, the actors on the ground.

I understand that the financial technology industry wants us to go fast. This has been dragging on for years, and we have to act. If we pass what we have before us, however, it will not be in place any faster. We will have to wait until the fall.

We should introduce a more complete and more serious bill in the fall, and send division 16 back to the government.

Mr. Chair, I request a roll-call vote on all of the clauses in this division.

[The Chair, Liberal, Peter Fonseca]

Okay.

Thank you, Mr. Ste‑Marie.

Is there any further debate?

Go ahead, MP Davies.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

I'd like to speak very briefly to this to set forth the position of the New Democratic Party.

I want to thank my colleague Mr. Ste-Marie for raising those concerns.

Generally we are very supportive of the concept of open banking, the idea that we want more competition in the financial services sector and the idea that the consumer should be firmly in control of their own data.

To clarify that, data should be made more easily transferable at the direction of the consumer so that the consumer can shift their money, resources and investments around. It is not only good for consumers; I think it will foster greater competition in the markets.

At the same time, I think that Mr. Ste-Marie makes some important points. It does strike me that there's a lot of work to be done in this sector. One thing I'll say is that one of the negative consequences of this committee's spending a lot of time discussing non-essential issues in the last couple of weeks is that it curtailed the amount of time we could have to hear from witnesses. One of the big deficiencies is that we did not hear from the credit union movement outside of Quebec.

I want to thank Mr. Ste-Marie for making sure that we heard from Desjardins, but I'm left wondering what the position of the credit union community is outside of Quebec across the country. We did not have the benefit of their testimony.

I would think that they would be supportive of these because, really, right now, the big five banks have a stranglehold on investments, and the purpose of open banking, which I understand many other countries in the world are ahead of Canada on, is to make sure that people have the ability to move and be in control of their data from the big five banks. I would imagine that the credit union community is in favour of that.

I just want to conclude by saying that I'm sympathetic to the concerns that Mr. Ste-Marie raises, particularly the one about jurisdiction in Quebec. I'm concerned about whether or not we have a fit-for-purpose body to enforce these regulations, but I do think overall that what's more important is to get open banking established in this country.

This may be imperfect. I'm hoping that maybe by the fall economic statement or by the next budget, which will be happening in 10 or 12 months perhaps, we'll have an opportunity to make refinements.

I think that we all here at this table see the benefits of open banking, but we all want to get it right. We will support this attempt to get open banking started with the proviso that there are concerns and issues that I think we're going to have to be revisiting over the next year and years ahead to refine the system to make sure that it works in the way that we all intend it to.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Davies.

I have a speakers list. I have MP Lawrence and then MP Dzerowicz.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

I will be relatively brief, because Mr. Davies said pretty much everything I was going to say.

It sounds like every party around the table supports the concept of open banking for greater competition, transparency and, hopefully, lower prices for consumers.

We, too, are challenged a little bit with the way this has been conducted. Specifically, I don't think I'd be doing my job as a member of the official opposition to not level a couple of criticisms. We are years behind many other advanced economies with respect to our open banking legislation, and all we've proposed so far is a framework, a flawed framework.

The government already had options put in front of it, including, as Gabriel Ste-Marie said, from Ryan Williams when they said that they supported wholeheartedly the concept of open banking, consumer banking and consumer-led banking. However, we do find challenges, as Mr. Davies and Mr. Ste-Marie have stated, particularly given the amount of time this government has had and the number of resources they've invested, presumably, in investigating and putting together this legislation.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lawrence.

Go ahead, MP Dzerowicz, please.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thanks so much, Mr. Chair.

I just want to say a huge thanks to Mr. Ste-Marie. I think he's made some very thoughtful comments, and I very much appreciated hearing them.

As someone who's been asking about open banking for many years now, I have confidence that our officials have been studying this, have been looking at it and have been trying to make sure that they've put forward a proposal that is right.

I feel very confident that we have an excellent proposal before us, and that's within this bill. I will very much be supporting it.

Nothing is ever perfect, so I agree with Mr. Davies that, if there are things that we need to adjust as we go along, let's do so.

Australia is already on version three of their open banking, so I would say let's get on with it. I do have a lot of confidence in our officials and that we have an excellent proposal here.

Thank you.