Mr. Speaker, it is a pleasure to rise in debate on Bill C-100. I am going to bring something a little different to this debate. I take my hon. colleague's comments very much to heart. This debate has been well motivated by the very best spirit of Parliament to try to bring all kinds of light to a very important piece of legislation before the House.
I have listened very carefully to the debate. We are dealing with the Office of the Superintendent of Financial Institutions and the Canadian Deposit Insurance Corporation. I will confine my remarks primarily to the Office of the Superintendent of Financial Institutions because this legislation is designed to enhance the protection of the assets of ordinary people. This is the kind of legislation that Parliament and the government should be all about. I believe it is exactly that.
Small people put their life savings into financial institutions which are regulated by the Government of Canada. We must at all costs ensure that their deposits are safe. This legislation builds on earlier legislation, primarily because we have seen some unfortunate incidents in the financial marketplace of late. I am thinking of the collapse of Confederation Life and the earlier difficulties with other institutions. Certainly the depositors and the investors in these organizations were paid back. Nevertheless, a question of confidence arose from these eventualities.
Bill C-100 is an effort to address this problem of confidence. In a nutshell the legislation gives a mandate to the Office of the Superintendent of Financial Institutions to investigate, along with various other things.
I am very interested in this legislation because it is a model for what can be done in other sectors. It is a model for what can be done in the not for profit sector.
It is well known that I am an MP who has shown a great deal of interest in the regulation of charities and non-profit organizations, which currently are, basically, very poorly regulated now. They are controlled by a hodge-podge of legislation here and there, court precedents and that kind of thing. Yet the not for profit sector represents about $120 billion of revenue a year going in and out of these organizations.
On the other hand, deposits of around $600 million are covered by Bill C-100. We have comparable huge industries, one that is subject to very fine regulation now, one that does not have very much regulation.
I would like to go through Bill C-100 and put it up against what I would like to see happen with the not for profit sector.
First, Bill C-100 gives a mandate to the Office of the Superintendent of Financial Institutions. In effect, it lays out the rules. It says this organization can investigate and monitor all institutions that are in the business of taking deposits from ordinary citizens. We would like to see with the not for profit sector a charity commissioner with a similar mandate, which incidentally does not exist at this time.
Bill C-100 also adds something that is vitally important and very near and dear to my heart. It enhances disclosure. The public throughout Canada is demanding that institutions be more transparent than they have been hitherto. To give the Office of the Superintendent of Financial Institutions the ability to track what is happening in deposit organizations Bill C-100 requires a higher level of disclosure.
For example, it requires all deposit institutions to disclose their balance sheets in much more enhanced detail than is defined by regulation. It requires the disclosure of executive salaries. That is a favourite issue with me because executive compensation is not a matter of privacy when dealing with the public trust. It is a way of determining whether the executives of an organization who have the public trust are acting in the public's best interest. In other words one of the most instant signals of trouble with an institution is a very high executive salary and very low results on the balance sheets.
Bill C-100 requires an enhanced level of disclosure of the assets and liabilities of deposit taking institutions. Some of my colleagues feel that is an invasion of the central government into the affairs of an organization. Indeed it may be a provincial organization such as the caisses populaires in Quebec.
Nevertheless if we are to know what is happening we need the details. It requires an enhanced monitoring of assets and liabilities. I can compare that with non-profit organizations and say that it would be an enormous step forward if the public had access to the details of how non-profit organizations are spending their money and what are their assets. Presently no such regime exists for non-profit organizations. As such, for charities it is very restrictive in its level of public disclosure.
Bill C-100, however, would give all this to the public so that everyone could see what is happening, including the Superintendent of Financial Institutions. This is the most important.
Bill C-100 defines the role of the Superintendent of Financial Institutions as his office monitors deposit taking organizations. There is a whole schedule of warning bells. Certain things happen. Certain things appear on the books. The Superintendent of Financial Institutions will ask questions. If further problems occur the questions will be more probing. They will go deeper and deeper. There is a whole schedule of early warning levels for the Superintendent of Financial Institutions.
The organization knows the benchmarks at each level, the benchmarks going down as it gets into trouble. It knows what to expect, what it has to give, and what is expected of it by the Superintendent of Financial Institutions. Bill C-100 lays out very clearly what will happen when there is a crisis and what are the steps if an organization is deemed to be in significant trouble, for example if its liabilities exceed its assets or that kind of thing.
I can compare with charities and non-profit organizations and say that is precisely what we want with charities and non-profit organizations that also have the public trust and are in effect chartered by the government. They ought to be able to convince the public that they are using the money wisely and well.
When it is determined that a deposit taking organization is in a sorry state financially, the Office of the Superintendent of Financial Institutions can move in to take over. Basically it will dismember the organization or sell it.
We need the same for the not for profit sector. Right now if a charity is deemed to be in trouble it is a painful and difficult
process to take it out of action no matter how extraordinary its failure is. In the case of not for profit organizations there is no real legislation to take them out of the picture at all if they have problems. We only find out about the problems when they get into such difficulty that it hits the news or if there is a criminal or extraordinary charge. Otherwise secrecy is the order of the day with respect to charities and non-profit organizations.
Bill C-100 applies transparency and a whole regime of what to do when organizations that have the public trust get into trouble. There is a series of regulations to look after the problem. I wish the revenue minister and the finance minister would take note of the structure and effectiveness of Bill C-100.
One problem of the not for profit sector is that it has been unregulated for many years. The problem of bringing in legislation to control it seems insuperable. However Bill C-100 is the model that could be used to set up a charity commissioner or a not for profit commissioner who would bring the entire $120 billion sector under regulation and into transparency so that public confidence in charities and not for profit organizations could be restored.
My comments will be in another direction temporarily. I listened with great attention to the debate on the bill in the House last Friday. I was struck by the comments of Bloc Quebecois and Reform Party members who tend to be opposed to the bill. At one point the Liberal member for Willowdale stood and with great passion complained that the opposition to the bill of the Bloc Quebecois, and to some degree the Reform Party, was as a result of their separatist leanings.
I listened with great attention to what I heard from the Bloc and the Reform Party and I did not hear separatism so much as I heard provincialism. I heard from the Bloc Quebecois and the Reform Party about the fundamental problem with Confederation. There is always a tension between the federal government in the central power and the provincial powers. The provinces are always looking for more power and saying: "You are intruding into our affairs". This is natural and normal aspect of Canada as we know it today. It is a pity that the Bloc Quebecois translates provincialism into separatism. Bill C-100 clearly illustrates why federalism works and why provincialism in this case should not be the order of the day.
I will explain myself. Certain aspects of our political life occur at a provincial or municipal level. At that level politicians are normally taken up by local needs, almost selfish needs. It is very difficult sometimes for local politicians to look at the grand scheme of things when they have local community and provincial concerns to look at. This was illustrated last week by a Reform Party motion dealing with the suggestion that the federal government should force municipalities to provide better sewage treatment rather than dumping effluent into the seas. It was a classic case of where it was easier for the municipality to use its taxes on things that matter to its people locally rather than to worry about the environmental aspects of a problem being caused to the country at large or the world at large.
So it is with financial institutions, with charities and non-profit organizations. The need for central regulation of charities and non-profit organizations is amply illustrated by the example of the Nanaimo Holding Society in British Columbia that is under investigation for suspicion of having diverted charity funds to the provincial NDP of British Columbia. Without commenting on where that investigation will go, it is the kind of reason we need arm's length regulation of public institutions with the public trust.
At the provincial level or the municipal level these organizations may be subject to undue political influence. If there is something like the Office of the Superintendent of Financial Institutions that can look from afar at an organization and be out of reach of local politicians we are better guaranteed that the public trust is being served by the organization. The warning will be sounded by an organization that has no axe to grind or has no involvement in the institution.
The classic example was during the recent referendum when it was claimed that the caisse populaire was supporting the Canadian dollar. We learned from the caisse subsequently that it was not doing any such thing. Nor should it. It is a classic reason for needing an organization like the Office of the Superintendent of Financial Institutions. If undue influence were exerted by the local political power, be it the province or the municipality, control would be in an arm's length organization that exists outside the zone of political interference.
Quebec and the caisse benefit from federalism because of an organization like the Office of the Superintendent of Financial Institutions. The benefit is even greater because all deposit taking organizations are dependent on the rest of the country for the confidence the public has in them.
Let us just suppose that every banking institution, every deposit taking institution were separately administered in each province, as I suspect has been suggested by the Reform Party. We would not have the level of confidence in the institutions that we have when people in Quebec or British Columbia, for example, know that the institution is subject to the same rules of transparency, openness and honesty across the country from sea to sea. It does not matter whether the organization is in Quebec or in Nova Scotia. Because we have organizations like the Office of the Superintendent of Financial Institutions, Canadians from sea to sea can have confidence in their institutions.
Bill C-100 deserves the support of the entire House regardless of our individual viewpoints on centralized government or decentralized government. This legislation serves us all regardless of our political viewpoints. It serves the ordinary person.
I should like to discuss the bill at great length but I know my time is up. It is the kind of legislation which makes federalism work and of which I am proud as a member of the government.