Evidence of meeting #49 for Procedure and House Affairs in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bank.
A recording is available from Parliament.
Conservative
Parm Gill Conservative Brampton—Springdale, ON
How would a bank really assess, say, the viability of a candidate or a campaign?
Conservative
The Chair Conservative Joe Preston
I'm trying to get as many in. You have gone over, if you don't mind.
Conservative
The Chair Conservative Joe Preston
We have Mr. Williamson for a quick one or two questions, and then I have a couple of one-off questions, and then we'll dismiss our witnesses.
Conservative
John Williamson Conservative New Brunswick Southwest, NB
I have three questions actually, but they go in a row.
Why would you want to be in this business?
Conservative
John Williamson Conservative New Brunswick Southwest, NB
I mean their business of administering this and being, frankly, the only lender, and lender of last resort.
Vice-President, Government Relations, Canadian Bankers Association
Banks already have historically provided political loans and I'm sure will continue, but they will do so within a context that they can. That's really the answer.
Conservative
Vice-President, Government Relations, Canadian Bankers Association
That's correct, and with proper risk management in place.
Conservative
John Williamson Conservative New Brunswick Southwest, NB
Okay.
Would you agree to an environment in the marketplace in which an entrepreneur's only source of capital is through a bank, a co-op, or a credit union? These are rather philosophical questions, but....
November 1st, 2012 / 11:50 a.m.
Vice-President, Policy and Operations, Canadian Bankers Association
If you look at the options available to businesses, they extend far beyond that right now.
Conservative
Vice-President, Policy and Operations, Canadian Bankers Association
I think that more competition in the business lending environment is a good thing.
Conservative
John Williamson Conservative New Brunswick Southwest, NB
All right.
I often consider myself a political entrepreneur in the work that has to be done day to day, with the election, re-election. My last question is not meant to sound harsh, but I think it has to be asked. If we're looking for fairness and a level playing field—and by level playing field I don't mean in terms of the valuations, but of getting people to the plate so that they can be a candidate and have access to resources—we're looking in the wrong direction by looking to banks, aren't we?
If it's fairness and access to capital, so that individual candidates, from the governing Conservatives to the Green Party, are able to....
Vice-President, Government Relations, Canadian Bankers Association
I think the answer to the question is that banks will bring an objective perspective to it. It is about assessing the viability of a campaign. That's what banks do—they lend. But they will do so on the principles we've talked about a great deal in the last hour. It is done objectively; it's done based on those criteria. It's not meant to favour one over another; it's simply done through what banks are mandated to do.
There is a prudential regulatory structure that governs this industry, which this industry takes very seriously.
Conservative
John Williamson Conservative New Brunswick Southwest, NB
I suppose my last question is, over the last several campaigns—
Conservative
Conservative
Conservative
NDP
Pat Martin NDP Winnipeg Centre, MB
Thank you, Mr. Chair, for the opportunity.
I've been following this with interest right from day one, when it was first put forward years ago. It strikes me that if you're guided only by your fiduciary or prudential obligations or guidelines, then the amount of interest you're going to have to charge for a small loan is going to be crowding the Criminal Code's usury provisions.
As to the fairness thing, I appreciate John's comments. We're not creating a level playing field by this. In fact, some people might be able to get a reasonable rate of interest at a bank because of their party's reputation, while somebody else is going to be down at the Money Mart or at a loan shark with a ridiculous rate to borrow that loan.
We had to put our house up to run the first time, back when it was a long shot. We're not allowed to do that any more. So in the interest of taking big money out of politics, we might in fact be creating an unlevel playing field that will diminish the fabric of our democracy by limiting the number of types of people who can take part. It's a real concern.
Vice-President, Policy and Operations, Canadian Bankers Association
To address the first part of that question, we lend billions of dollars to small business and medium-sized businesses at interest rates that are very competitive. We have authorized approximately $80 billion to SMEs in Canada. In fact, banks are notorious for lending within a range of prime rate to prime plus 3%.
NDP
Pat Martin NDP Winnipeg Centre, MB
You were making the point that you were after cost recovery plus profit. For doing the due diligence on 20 people in order to lend $15,000 or $20,000, you have to be charging a really big rate of return.
So without some public financing, I'm going to suggest that maybe the government should be offsetting your costs for doing the research on the loans as their way of public participation. Maybe the lending institution should be looking for some support so that you can enable the democratic process in a “corporate social responsibility” or “public duty” way. Maybe this is something the committee should be looking at.
Conservative
The Chair Conservative Joe Preston
I'll leave it at that. The government supporting the banks now. Great.
Thank you very much for your openness and your answers to our questions today. It's been great having you here. Maybe you've created more questions than you've answered, but that tends to happen with a lot of our witnesses.
We will suspend for a moment and then go in camera for some committee business.
[Proceedings continue in camera]