Debates of June 7th, 1994

Supply

[Elwin Hermanson, Reform, Kindersley—Lloydminster, SK]

Madam Speaker, today I have the honour and privilege to speak in favour of the Reform motion which states:

That this House strongly affirm and support the desire of Canadians to remain federally united as one people, committed to strengthening our economy, balancing the budgets of our governments, sustaining our social services, conserving our environment, preserving our cultural heritage and diversity, protecting our lives and property, further democratizing our institutions and decision making processes, affirming the equality and uniqueness of all our citizens and provinces and building peaceful and productive relations with other peoples of the world.

What a wonderful vision of Canada. I am happy to join with my leader, the hon. member for Calgary Southwest, and my colleagues who have shown leadership and vision in beginning to define a new federalism that can create a revitalized or a new Canada to which 10 or more provinces can look with pride and accomplishment.

I am disappointed in the government's amendment. It calls for a cake with no recipe. It is a continuation of the irresponsible role played by this Liberal government where it insists on Canadian unity but has no blueprint to achieve the goods. It has no way of accomplishing what it has set out to do and it is compromising federalism in the process.

In January the leader of my party described the 35th Parliament as one without precedent and it surely is. A few years ago not very many prognosticators would have predicted a House of Commons where the Official Opposition, the Bloc Quebecois, would sit in this House happily accepting the title of Official Opposition, would swear allegiance to the Queen and would collect a salary from the federal treasury all the while on a mission to break up Canada by taking Quebec out of Confederation.

Even fewer forecasters would have guessed that a federal Liberal government would sit idly by and pretend it was not so. Who could have guessed the Liberal government would sit on its hands and play politics as usual while separatists were chipping away at the very foundation of the country?

This sad state of affairs explains the need for Reformers to bridge the gap and start pouring a new brand of unity concrete to provide some cement to which Canadians with a commitment to federalism might attach themselves, including those who live in Quebec, perhaps especially those who live in Quebec.

I will take a few moments to speak to the motion and particularly the phrase "preserving our cultural heritage and diversity". There are many myths and misconceptions associated with culture and heritage. One tends to associate myths with the ancient Greeks, Egyptians and Babylonians, but we have fostered a few in Canada too. Some of the myths most commonly perpetuated include:

Myth No. 1: Canada is composed of two founding nations. Some have gone so far as to call the English and the French the founding races. While the myth may describe a contract between upper and lower Canada it is exposed when you consider the fact that aboriginal people have always been a factor in Canada and that for all of our 128 years as a nation, people have come from every corner of the globe to help build this country.

Myth No. 2: Canada will become more unified if we enact language legislation. The Official Languages Act has not made Canadians feel more unified. It has been a bone of contention in our land. It has put a black mark on bilingualism in Canada, rather than permitting it to be a prestigious step of accomplishment like knowledge of languages should be.

Myth No. 3: Canada will only be able to sustain its multicultural heritage if the government bundles up tax dollars and earmarks them for song and dance across our land to preserve our diverse cultural heritage.

Reformers have done an excellent job of debunking the myth that Canada can still be described as a nation of two founding cultures. Clearly we have moved far beyond this narrow view of our country. A few weeks ago Reformers spoke at length about the failure of official bilingualism in this House and put forth a

realistic and constructive alternative which would prove much less divisive and less costly than the status quo.

I will deal briefly with the third myth, that having an official multiculturalism secretariat that gives grants and makes lofty pronouncements is not the best means of preserving our multicultural heritage in a harmonious manner. Government should get out of the multicultural business. Let me explain what I mean by the multicultural business.

The Secretary of State for Multiculturalism spent over $3.8 billion in 1992-93. Much of this budget we would transfer to other more suitable departments and ministries. The $2.9 billion transferred to the provinces for post-secondary education is a good example of a program that would be protected from cuts under the Reform plan. The $500 million in student loan guarantees is another good example, as is all federal funding to fight racism and human rights protection.

However, the funding to universities, private individuals and associations promoting cultural development, totalling over $26 million, could be eliminated. Furthermore, $47 million in taxpayers' hard earned money could be saved by cutting funding to language-based special interest groups in all parts of the country.

If, as we have argued, the federal government is not the appropriate body for funding and running multiculturalism, then who should be responsible for preserving, conserving, encouraging and paying for our cultural heritage? That is a fair question. The Reform Party supports the principle that individuals and groups are free to preserve their cultural heritage using their own resources and we shall uphold their right to do so.

We would focus federal government activities on enhancing the citizenship of all Canadians, regardless of race, language or culture. We oppose the current concept of hyphenated Canadianism as pursued by this and previous governments.

If you reject the idea that culture can be designed or engineered by the state, then it only stands to reason that the development, preservation and promotion of our multicultural heritage should be left to individuals, private associations, or in some cases lower levels of government.

The focus of the federal government should be the prevention of discrimination on the basis of race, language or culture. How would this approach affect Quebec? I think this is the focus of what we are discussing in this House today. Reformers believe this approach to linguistic and cultural issues may hold the key to Quebecers' aspirations to feeling culturally and linguistically secure. It would allow Canadians in Quebec to promote and preserve their language and culture through their provincial government. Therefore, the federal government should transfer its efforts at protecting and promoting language and culture to individuals and lower levels of government.

In the case of Quebec, the provincial government would likely accept the challenge. Other provinces may not choose to do so, but we believe the prerogative should lie with the provinces as to whether they want to promote language and culture within their jurisdiction.

The federal government would maintain and even revitalize its role in preventing discrimination of minorities wherever in Canada they may be. We believe the federal government should provide the glue that helps hold us all together, no matter where we are from, no matter what our cultural heritage, no matter whether we are first generation Canadians or 10th generation Canadians.

By allowing people the freedom to pursue their linguistic and cultural interests independent of federal government interference we would create a more unified country. It is far more productive to stress those things which all Canadian citizens share in common rather than to emphasize differences that threaten to tear us apart. If the government would work to bring Canadians together we would all be a lot happier.

Therefore I strongly support our motion. I believe it is a blueprint to prepare Canada for another 128 successful years as a Confederation of 10 equal provinces, perhaps more if the northern territories are brought into Confederation. It is a country in which we can all feel secure, whether our heritage is Asian or European, whether it be French ancestry, English ancestry or whether it be First Nations, the aboriginal people of Canada. That is the kind of Canada in which I want to live in the future and that is the kind of country I believe most Canadians would be quite excited about, working for and preserving.

[The Acting Speaker (Mrs. Maheu)]

It being 5.15 p.m., it is my duty, pursuant to Standing Order 81(16), to interrupt the proceedings and put forthwith all questions necessary to dispose of the supply proceedings now before the House.

The question is on the amendment. Is it the pleasure of the House to adopt the amendment?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Mrs. Maheu)]

All those in favour of the amendment will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker (Mrs. Maheu)]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker (Mrs. Maheu)]

In my opinion the yeas have it.

And more than five members having risen:

[The Acting Speaker (Mrs. Maheu)]

Call in the members.

(The House divided on the amendment, which was agreed to on the following division:)

[The Speaker]

I declare the amendment carried. The next question is on the main motion, as amended. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Speaker]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Speaker]

In my opinion the yeas have it.

And more than five members having risen:

(The House divided on the motion, which was agreed to on the following division:)

[The Speaker]

I declare the motion, as amended, carried.

It being 5.55 p.m. the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

Credit Card Interest Calculation Act

[Paul Devillers, Liberal, Simcoe North, ON]

moved that Bill C-233, an act to provide for the limitation of interest rates, of the application of interest and of fees in relation to credit card accounts, be read the second time and referred to a committee.

Mr. Speaker, I am happy to sponsor this bill entitled an act to provide for the limitation of interest rates, of the application of interest and of fees in relation to credit card accounts.

Since their introduction in 1968 credit cards have been a major source of convenience for thousands of Canadians. Last year there were over 55 million credit cards in circulation which accounted for over 10 per cent of all consumer spending in Canada. They have become more than just another means of payment. Renting an automobile or reserving a hotel room for example can be impossible without a credit card.

Hardly a day goes by when I do not use my cards as identification or for a purchase. However, sometimes convenience has its costs and in the case of banks and retail cards it can be very costly indeed.

I decided to address the more contentious issues surrounding credit cards through legislation because I believe there is a great need to regulate what I and many people consider to be unfair practices for Canadian consumers.

I am fully aware that important players in the financial markets cringe at the mere thought of any legislation affecting their sector. They will be quick on their feet claiming the market should be left alone and in the end everything will be fine.

I will nonetheless try to demonstrate to the House that there is ample evidence to warrant regulation.

This is not the first time Parliament has considered the question of credit cards. During the past eight years, three parliamentary committees have examined the credit card industry in Canada. The Standing Committee on Finance published a report in 1987, and the Standing Committee on Consumer and Corporate Affairs did so in 1989 and 1992. Each study approached the issue from a somewhat different perspective.

The concerns addressed included the size of the competition, obstacles encountered by consumers attempting to obtain information on rates, and the question of how interest is calculated, but the main contention was always the fact that interest rates were high and tended to remain so, despite the level of other types of rates.

The banks repeatedly told the committees that their rates were reasonable, since they did not produce a very high yield. That is hard to believe, especially when we see banks making record profits. Every time committee members asked what their rate of profit was, the banks refused to give the information, arguing that it would make them vulnerable to the competition. Despite this lack of co-operation, committee members found that the banks were collecting interest fees from between 70 and 80 per cent of their customers.

Bankers also argued that because the financial institutions take a high risk on many card holders they need a higher return on the cards than any other kind of loans to cover losses. However the evidence before the Standing Committee on Consumer and Corporate Affairs showed that there were fewer defaults on credit card loans than on corporate loans and on other kinds of consumer loans.

When the issue of capping rates was raised, the bankers threatened they would be forced to deny cards to lower income people. This did not sit well with the committee members since the banks' own figures suggested that lower income Canadians were more likely to pay off their monthly balance than their higher income counterparts.

The 1987 finance committee report states that 83.3 per cent of those they considered low income people would discharge their monthly balances, whereas 41 per cent of the card holders with incomes of over $60,000 or more routinely did not pay off their monthly balances.

Ann Finlayson and Sandra Martin, two investigative journalists, summed up these tactics very accurately in their book entitled Card Tricks . I quote: ``The bankers' insistence that they would have to cut off lower income card holders proved nothing more than that they would cut off lower income earners, a stance that was strikingly similar to their extremely hard line on small business loans at the time''.

Finally, as a result of this exercise in futility, members realized how difficult it was to obtain from the banks the information they needed to make intelligent recommendations. The banks did try to smooth ruffled feathers with a slight reduction in credit card rates. In 1989, the Standing Committee on Consumer and Corporate Affairs revealed that when the Standing Committee on Finance was revising the first draft of its report in 1987, the spread between the Bank of Canada rate and the interest on Visa cards was 11.46 percentage points, while shortly after the report was tabled, the spread dropped to 7.31 points.

I would like to explain what Bill C-233 would do if enacted. The bill has two purposes: it limits the amount of interest that financial institutions and retailers could charge, and it creates a standardized method of calculating interest charges and a mandatory grace period for partial payments on all types of credit cards.

We are told that we should not regulate interest rates in our free market society. There is a federal law dealing with credit card interest rates, section 305.1 of the Criminal Code. However, its applicability to loans advanced under credit cards is remote, given that the definition of criminal interest rate is an effective annual rate of interest that exceeds 60 per cent of the credit advanced under an agreement or arrangement.

Bill C-233 would regulate credit card interest rates in a realistic manner. The ceiling on rates would float with the average of the weekly Bank of Canada discount rate from the previous month. The spread between the card rate ceiling and the average bank rate would depend on the type of credit card. The finance committee's 1987 report concluded that among the different types of ceilings that could be used, a floating limit seems more sophisticated and more practical.

Credit cards issued by financial institutions, which include credit unions, caisses populaires and other co-operative credit societies could not carry interest at a rate exceeding the Bank of Canada discount rate by 6.5 or 8.5 per cent, depending on whether the institution charges entry fees, renewal fees or user fees.

Credit cards issued by petroleum companies could not carry interest at a rate exceeding the Bank of Canada discount rate by 9.5 per cent. Those issued by retail stores could not carry interest at a rate exceeding the Bank of Canada discount rate by 11.5 per cent on any unpaid monthly balance exceeding $400.

Retail cards would use a tiered system instead of a floating limit. The rationale for a tiered system in this instance is that retailers do not have the same leverage that financial institutions enjoy. This system would recognize that operation costs on credit cards is higher for retailers than it is for financial institutions.

I must point out that the retailers have nonetheless abused their credit card practices. Their rates have remained virtually unchanged at 28.8 per cent throughout the 1990s when consumer interest rates were falling to record lows.

The Minister of Industry has already written to the president of the Retail Council of Canada urging council members to cut their rates.

I suggest capping credit card rates, because many people have the impression that credit card issuers are making exorbitant profits.

As I said earlier, the facts appear to confirm this impression. The capping concept is not new or radical. In fact, more than 35 American States have introduced this measure. Once again, this is a precedent for the regulation of financial markets.

In its 1989 report, the Standing Committee on Consumer and Corporate Affairs recommended that the spread between credit card rates and the bank rate should never exceed 8 per cent for bank cards and 16.5 per cent for retail cards.

The 1992 minority report said that when the Bank of Montreal introduced a credit card with a floating ceiling of 5.5 per cent plus prime, it proved that banks have other ways of making money. It also confirmed that floating credit card rates did not fly in the face of the laws of finance and were not a financial disaster for the banks.

The rates I used are based on information provided in the bill tabled during the last Parliament, which was reproduced in the 1989 report of the Standing Committee on Consumer and Corporate Affairs.

As already mentioned, the second component of Bill C-233 would make interest calculation on all types of credit cards uniform and would enact a mandatory grace period for partial payments.

This proposal has been long sought by various advocacy groups such as the Consumers Association of Canada. Furthermore, recommendations to this effect are contained in both the 1987 finance committee report and the 1989 consumer and corporate affairs report as well as a minority report struck in 1992. Clearly there is a great deal of support for the changes Bill C-233 espouses.

I will use an example to illustrate my case. Let us say that you make a single purchase of $1,000 on your credit card and this is the only item on your monthly statement. Once you receive your statement you usually have a 21-day grace period to pay the full amount interest free. However, if you make a partial payment of $700 you will be charged interest in two ways. First you will pay interest on the $1,000 from the date of purchase to the date of the $700 payment. Second, you will be charged interest on the remaining $300 from the partial payment date to the next statement date. In other words, issuers of financial institution credit cards are making their money off the backs of people who, for whatever reason, do not pay their full amount in order to compensate for the grace period they offer people who do pay the full amount.

This is what I refer to as the reverse Robin Hood theory, robbing from the poor and giving to the rich. In effect, the grace period is a marketing device to get people to hold and use credit cards.

Under Bill C-233 the simple distinction between the charge and credit functions of a card would be altered. Hence, the part of a purchase that is paid on the due date, the so-called partial payment, would be treated as a delayed cash payment while the remaining balance would be treated as a loan and would be the only part to bear interest.

The card holder would in effect have a grace period from the date of purchase to the date of partial payment. For example, you make a $1,000 purchase on your credit card and after receiving your statement you pay $700.

Your next statement would show interest charges on the remaining $300 from the first statement date to the second statement date. You would not be charged interest on the $700 payment as is currently done by financial institutions.

We are talking about responsibility and fairness here. It is clear that people who accumulate debts on their credit card must take their responsibilities. However, we should not forget that it is not in the interest of credit-card companies that monthly bills be paid in full. They only take advantage of people who, for one reason or another, can make only partial payments.

As we have seen in the case of banks' cards, partial payments do not reduce the amount on which interest is calculated and, in the case of retailers' cards, interest rates are outrageous.

Organizations such as the Association coopérative d'économie familiale and the Service d'aide au consommateur in Shawinigan deal with hundreds of people who are heavily in debt. They find that it is too simple to obtain a card or to have the credit limit increased and that credit-card companies do not care about the social effects of credit that is too easily obtainable.

In March, the Service d'aide au consommateur in Shawinigan released a study entitled: "Credit cards-Problems for consumers, profits for credit-card companies" which stated, and I quote: "Credit-card companies, being mostly concerned about their profits, have often overlooked the serious effects that credit cards could have on the consumer's life".

Some people feel that Parliament should not legislate the credit card industry if people freely choose to enter into this type of contract. The problem is that this is not a free contract where you can negotiate the terms of the agreement such as a regular bank loan. You either accept the terms offered by the credit card issuer or you do not get a card. For people who are well off, opting not to play by the rules imposed by the credit card issuer is an option. Unfortunately there are many consumers who depend on short term credit to conduct their daily lives in an orderly and efficient way.

The work force is changing and more and more people are becoming self-employed. They do not always have the advantage of receiving a pay cheque every two weeks. In this situation, a credit card becomes essential.

I am always quickly reminded that Canadian banks are not public institutions even though they fulfil a public purpose. The fact remains that Canadian banks are in a very privileged and an enormously powerful situation in Canada. True competition in an oligopolistic market is questionable.

The minority report in 1992 accurately described our peculiar free market arrangement: "Evidence has amply proven that the credit card interest rates and bank service charges in Canada do not respond to the market system but to oligopolistic forces and that oligopolistic forces are by their very own nature, political and therefore only respond to public pressure".

Many people feel that Canadian banks do have a responsibility to be more responsive on issues such as credit card rates, farm loans and small business loans precisely because for the special status they hold in our marketplace.

We must realize that credit-card companies have absolutely not taken into account the many aspects that I have just mentioned. Therefore, I think that the time has come to put some order in the credit-card industry. Bill C-233 is undoubtedly a step in the right direction.

I have in my possession a legal opinion from the legislative counsel of the House of Commons stating that the Government of Canada has jurisdiction to enact the regulations sought in this bill.

In conclusion I would like to thank the many organizations that have assisted me in this very complicated matter. A special thanks to my colleagues in the House and to my constituents who have supported this bill. I hope that our concerns will be addressed soon.

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Madam Speaker, as industry critic, I am pleased to address this bill. First, I would like to congratulate the hon. member for Simcoe North for introducing Bill C-233, an act to provide for the limitation of interest rates, of the application of interest and of fees in relation to credit card accounts.

The main purpose of this bill is to limit interest rates on credit cards. According to this bill, an oil company or a retail store could not charge annual interest rates exceeding by more than 9.5 and 11.5 per cent respectively the Bank of Canada discount rate. A card issued by a financial institution could not bear interest rates exceeding by more than 6.5 or 8.5 per cent the Bank of Canada discount rate, depending on whether the institution charges a fee for getting, renewing or using one.

At this point, I would like to commend, as the member for Simcoe North briefly did before me, the Service d'aide au consommateur in Shawinigan, which has been brilliantly managed for many years by Mrs. Madeleine Plamondon of the Saint-Maurice riding. That organisation has been defending consumers for many years. Last March, it published a document on credit cards and it just published another one on life insurance. For many years now, it has been quite successful in it's advocacy of consumers' interests.

To give you an idea of the importance of this phenomenon, which is increasingly present in our lives and our economy, let me mention some statistical data which depict it very well.

The number of credit cards in circulation in Canada is estimated at 55 million according to an Industry Canada study published in December 1993, so it is recent enough. This means 2.7 cards for each adult aged 18 or more. Of this number, 25 million are Visa or MasterCard, compared to only 12 million in 1981. The number has therefore doubled in a little over 10 years. Then, there are 17 million cards issued by department stores and 3.3 million by gas companies.

Between 1992 and 1993, the number of Visa and MasterCard credit cards increased to 25 million from 24.4 million. This is 600,000 cards more in circulation in a single year.

Visa and MasterCard generated more than 695 million transactions in 1993. The volume of sales reached $47.9 billion compared to $43.1 billion in 1992.

Finally, at the end of October 1993, the total outstanding balance on Visa and MasterCard accounts was $13.2 billion, a very large and very distressing amount. This is an increase compared to 1992, with $11.4 billion dollars. This outstanding balance is three times higher than in 1981.

To have a better idea of the problem, you have to know that, according to the same document, in 1993, interest rates paid by consumers using a MasterCard or Visa credit card were around 15 per cent. Those who had a credit card from a petroleum company, such as Petro Canada, Imperial Oil and Irving Oil, paid 24 per cent. Big department stores always want consumers, and we can understand why when we know they charged 28 per cent, again according to the Industry Canada document. I want to name each one, it is worth it: Canadian Tire, Eaton, Home Card, The Bay, Sears, Simpsons and Zellers. These stores charged 28.8 per cent interest on outstanding balances. Now we can understand the whole problem.

As for our evolution as a nation-again I want to thank the member for Simcoe North for giving us this opportunity-we should also note how consumer credit evolved over the last thirty years or so. In 1960, the consumer credit was at $3.5 billion. In 1981, it was at $46.6 billion and in 1992, it was up to $99.5 billion.

It is interesting to compare these figures to personal bankruptcy statistics. You do not have to be a genius to see the relationship between consumer credit, or indebtedness, and a potential personal bankruptcy. The number of personal bankruptcies in Canada went from 2,700 in 1970 to 23,000 in 1981 to 61,882 in 1992.

Between 1986 to 1992, the ratio of debt to disposable personal income rose from 48.4 per cent to 66.2 per cent. What we must remember is that credit cards went from being a method of payment to facilitate transactions to a credit mechanism. That is how serious the situation has become.

Credit equals debt. Credit cards enabled consumers to make major purchases easily and quickly-these are the key words-to travel, buy presents for themselves and others, cover unexpected expenditures and spread out payments over the rest of the year by paying a lot of money in interest.

This overconsumption-because we live in a society of mass consumption-often became synonymous with debt. This excessive debt results in large part-when we look at the consumers' assistance service like the people in Shawinigan did-from the large number of credit cards on the market and the vast amount of credit extended to consumers. Each credit card has a credit limit but for multiple card holders, the credit limits add up. That is, as the studies show, where consumers get all tangled up and lose control of their personal finances.

The situation is quite serious-as is pointed out-as only 50 per cent of credit card holders pay the full amount by the due date. Analyses show that of the 50 per cent who, statistics tell us, pay by the due date, 20 per cent settle their bills by borrowing on their personal line of credit. That is when debts start piling up as consumers use different credit cards and borrow from their personal line of credit to pay off their credit card debts. They get deeper and deeper into debt and end up having to declare bankruptcy, which becomes a kind of vicious circle.

According to the analyses, this phenomenon is due to three major causes. First, consumers' lack of information and education concerning methods of payment. People do not have enough information. Lenders make credit too easy and too accessible without exercising sufficient control or caution, which leads to excessive debt. There are also the factors on which people have

no control, serious events in life such as job losses, separations, divorces, accidents and health problems.

Certain stakeholders have a responsibility to correct the situation starting, of course, with the consumers themselves who are responsible for their own actions. Consumers' associations must pursue their commendable education efforts. It is, of course, very important that the institutions that issue credit cards be better monitored. Finally, governments must continue to encourage education and information efforts but they must also regulate, and one way to regulate is to limit interest rates, as proposed in the bill before us today, and that is why we support it.

[Dennis Mills, Liberal, Parliamentary Secretary to Minister of Industry]

Madam Speaker, I did not realize that the opposition party was not going to speak on this bill.

I wish to congratulate the member for Simcoe North for his efforts in trying to ensure fair prices for his consumers. This is a very important issue because it is not only central to the care and concern that we must have for consumers, it is right in line with our government's policy to make sure that we look at ways access to capital for small and medium size business is also dealt with. This is very much in that same sort of philosophical direction.

We are trying very hard to make sure that consumers begin getting a fair shake from the financial institutions in this country. I believe that the member for Simcoe North has identified an issue of concern to each and every Canadian.

A great deal of parliamentary attention has been paid to this issue over the last seven years. Three parliamentary committee inquiries were held on this subject between 1987 and 1992. In the course of those inquiries a good deal of the evidence brought to light did not support the concept of regulating interest rates at that time.

First, there was evidence suggesting that if rates had been capped between 1973 and 1991 the real savings for the average card holder would have been small. For example, a consumer carrying a balance of $1,000 would have saved only about 50 cents per month. Also, it appeared likely that the caps would cause lenders to restrict access to credit for groups of people deemed to be higher credit risks. This could include people with low incomes and those with below average levels of education together with young adults and recent immigrants. Thus it is possible that the very people the bills were designed to help could be adversely affected by this bill.

Moreover, it was suggested that if interest rate ceilings were legislated they would likely in practice become floor prices. To maintain their revenue levels lenders could simply vary other cost factors such as annual fees and grace periods.

While sections of this bill dealing with service charge limits and interest calculations would address this last consideration I am concerned that the comprehensive controls proposed by the hon. member could act to diminish competition at a time when credit card markets offer more consumer choice than they have ever had in the past.

I would once again like to congratulate the member for this initiative. I would like to ask for unanimous consent to move the following motion:

That the motion be amended by deleting all the words after the word "that" and substituting the following:

That Bill C-233, an act to provide for the limitation of interest rates, of the application of interest rates and of fees in relation to credit card accounts, be not now read a second time but that the order be discharged, the bill withdrawn and the subject matter thereof referred to the Standing Committee on Industry.

[The Acting Speaker (Mrs. Maheu)]

Does the hon. parliamentary secretary have the unanimous consent of the House to move the amendment?

[René Laurin, Bloc, Joliette, QC]

Madam Speaker, we would like to have some explanation, please. Could you tell us what will happen to the member's bill if second reading is refused now and the whole thing is referred to the Standing Committee right away? I would like some explanation of the step that is being skipped over.

[The Acting Speaker (Mrs. Maheu)]

Instead of remaining a non-votable bill, it disappears and the subject matter is referred to committee for a full study.