Evidence of meeting #53 for Government Operations and Estimates in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was post.
A video is available from Parliament.
Vice-President, Finance, Risk and Prudential Policy, Canadian Bankers Association
I don't have data on that. I don't know how many applications a bank would typically get, and I don't know how many openings they would have at any given time.
Conservative
Alupa Clarke Conservative Beauport—Limoilou, QC
Fine.
Mr. Irwin, if I'm not mistaken, your association is more or less in favour of a postal banking service, correct?
President, Canadian Consumer Finance Association
We don't really have a position, per se. My role in coming here today was to explain a bit about our industry and about the products we offer. We welcome competition, and certainly I think if that's the direction in which anyone wants to go, then it's better for consumers to have more choice.
Conservative
Alupa Clarke Conservative Beauport—Limoilou, QC
Fine.
You were saying that one of the objectives set out by those who are in favour of the creation of a postal banking service is to broaden access to credit.
Do you think that if Canada Post offered banking services, Canadians would have greater access to credit in all of its forms?
President, Canadian Consumer Finance Association
I guess that would really be more a question of how postal banking would be run and what their risk appetite would be. I don't know what type of lending they would do, so it would be difficult for me to answer that.
Conservative
Alupa Clarke Conservative Beauport—Limoilou, QC
Fine.
My question is for you once again, Mr. Hannah.
In your document you present figures that indicate that thanks to the Internet and online services, Canadians have more access than ever to banking services. However, while travelling throughout Canada in the course of these 22 public consultation meetings we have held, our committee has observed that Canadians have trouble accessing the Internet because they live in very rural regions, or very remote areas in the North. Also, some bank branches are closing.
I think it would be good to know what you are saying to those Canadians. Personally, I hate cell phones, even though you saw me using one. In fact, I don't have a choice. I do prefer going to my bank in Beauport, where I live, to do my transactions. I function in a somewhat archaic way. I am conservative, after all.
As a representative of the Canadian Bankers Association, what do you have to say to these Canadians, whether they are seniors or people who live in rural areas, who have indicated that they have less access to banking services than they used to?
Vice-President, Finance, Risk and Prudential Policy, Canadian Bankers Association
Let me start with a few facts. I've said them before, but I think they're important to mention.
There are over 6,300 bank branches in this country. There's a very substantial network of bank branches. Ninety-nine per cent of Canadians have a bank account, and everyone can get a bank account if they want one. Access is out there.
More than half of Canadians prefer to do their banking online. I'm certain if you aren't comfortable with it, if you go into your bank, they will be happy to walk you through the process and you will feel great by the time you're done.
Conservative
Alupa Clarke Conservative Beauport—Limoilou, QC
Thank you.
I'd like to talk about another aspect my colleague mentioned, that is the amount of money Canada Post would have to have access to, from the outset. My colleague asked you what sort of money Canada Post would need to have on hand. He spoke of billions of dollars and you smiled, and said that it would be an enormous amount.
Generally speaking, what are the liquidities of Canadian bank branches? For instance, how much money does a regular National Bank branch, located on the side of the road in my riding, have in its coffers?
Vice-President, Finance, Risk and Prudential Policy, Canadian Bankers Association
The cash on hand in the branch is not what determines, from the regulator's perspective, whether you're sufficiently well capitalized.
Vice-President, Finance, Risk and Prudential Policy, Canadian Bankers Association
It's the amount of investment that goes into the institution to backstop it so that the regulator can have confidence that the institution is able to manage itself properly and safely.
Conservative
The Chair Conservative Tom Lukiwski
Thank you. I was a little concerned you might be breaking out a hoodie or something like that.
Conservative
Liberal
Brenda Shanahan Liberal Châteauguay—Lacolle, QC
Full disclosure, I am a former banker. I certainly saw many changes, from the very intense branch activity back in the eighties, and then in the nineties when there was considerable downsizing, and branch closures in fact, and then the advent, of course, of technology that we're grappling with today as to what that will mean going forward.
With regard to commercial banking, though, we've talked a lot about retail customers and what they need. However, we've heard a lot of testimony about growing opportunities for small sellers, micro-business. We heard from one fellow when we were on the road who is selling $15 million in mukluks, and he's selling them all over Canada and internationally. There are very interesting opportunities, and that is very much of concern to us.
Now, I get it: banks are there to maximize shareholder value and to take advantage of whatever opportunities are there. However, Mr. Hannah, in the banking community today, have you looked at those opportunities in rural and remote areas, and are you looking at that? How do you serve those clients?
Vice-President, Finance, Risk and Prudential Policy, Canadian Bankers Association
That's a great question. I'm glad you raised it.
With respect to commercial lending, what you see a lot, and you'll especially see it in agriculture, in small business, is that increasingly you will see the lender going out to the client. They'll be mobilized. They'll be operating outside of the branch structure to make it easier for you, the borrower, the entrepreneur, to be able to engage directly with the banker on your own terms.
Liberal
Brenda Shanahan Liberal Châteauguay—Lacolle, QC
Okay, but in a situation where the banker cannot physically go out.... We're talking about microcredit opportunities here, but it's still very interesting on an aggregate basis.
Vice-President, Finance, Risk and Prudential Policy, Canadian Bankers Association
Well, in that case, you start getting back into technology: how can I interact with you on an effective basis to give you the kind of robust relationship you're looking for, that experience, while trying to overcome the geography that you're talking about? The geography is always there and has always been there. What the technology allows you to do now is find ways to overcome that meaningfully.
Liberal
Brenda Shanahan Liberal Châteauguay—Lacolle, QC
That's, of course, another challenge that we have, that we are not completely connected from coast to coast to coast. That's certainly something we're grappling with as a government, as a country, to ensure that all citizens have equal access. However, I'm just trying to get my head around where there could be a synergy, where there could be opportunity for the banking community to be working with what we are seeing as emerging opportunities, and very exciting ones.
Mr. Martin.
Senior Policy Advisor, Canadian Credit Union Association
We're heavily involved in what you might call microcredit in the first place. The Canadian Federation of Independent Business just came out with a research study. Every few years they rate the bankers in terms of the quality of service, and credit unions came out on top for lending to microcredit, which is basically defined as institutions of five individuals or less. We're doing pretty well in that space.
If you're talking about remote areas, maybe in the Northwest Territories, Nunavut, or Yukon, I'll tell you frankly, we're not there because we don't have credit unions incorporated in the north. However, coming to Darren's point, there may be an opportunity, based on technology, to deliver in some of those areas. We have had discussions with Arctic Co-operatives Limited in the past. I think they were having discussions with Desjardins also, as well as some of the banks, and we were invited in to participate.
We have been interested historically in doing that, but we haven't been successful moving up there.
Liberal
Brenda Shanahan Liberal Châteauguay—Lacolle, QC
Okay, but if we're now thinking outside the box, what would that look like? You mentioned that some of your members are interested in partnering with Canada Post. Of course, it's the parcel business that is doing well now, and it will have some challenges going forward, but certainly there seems to be some synergy between Canada Post and these small sellers who don't have easy access to private couriers.
What does that look like to you?
Senior Policy Advisor, Canadian Credit Union Association
I'm going to be very brief because I'm not sure. I don't design the business models, so I feel as though I'm getting into an area where I don't feel comfortable speaking to it.
October 31st, 2016 / 3:35 p.m.
Liberal
Conservative
The Chair Conservative Tom Lukiwski
Thank you very much.
Monsieur Clarke and Mr. McCauley, you have five minutes.