Madam Speaker, I am pleased to rise in this debate on Bill C-335 introduced by the member for Don Valley North.
The aim of this bill is to amend the Bank Act in order to require, as it says in the summary of the bill, the minister to consider commitment to serving small and medium size enterprises in Canada as a factor in a decision whether to grant letters patent to a foreign bank to operate in Canada.
In other words, so the ordinary folks may understand, the intent of this bill is to add another condition to those already governing foreign banks wanting to do business in Canada, a sort of requirement to provide more help to small and medium businesses.
I would first like to point out that there are already, as I have just mentioned, conditions governing the entry of new banks into the Canadian market. They should be identified, before we discuss the relevance of the condition added by the member for Don Valley North.
Section 27 of the Bank Act provides a number of conditions foreign banks must satisfy in order to receive their letters patent, and they are as follows: the nature and sufficiency of the financial resources of the applicant or applicants as a source of continuing financial support for the bank. They want to know whether the bank will be viable once it is operating in Canada.
The second condition is the soundness and feasibility of plans of the applicant or applicants for the future conduct and development of the business of the bank.
The third is the business record and experience of the applicant or applicants.
The fourth condition is whether the association will be operated responsibly by persons who are fit as to the character, competence and experience suitable for involvement in the operation of a financial institution.
Finally, the fifth and last condition, the best interests of the financial system in Canada.
The purpose of Bill C-335 is to add one of these conditions, and, again, this is to require, or to encourage, the banks-this is not made clear in the various clauses in the bill-to assist small and medium sized businesses. It would be hard not to be in favour of this. Of course we recognize the good intentions of this bill and, as far as its principle is concerned, we have no objection to such a condition being added.
It would, however, be a good idea to clarify a number of points. Perhaps it is a printing error, or merely an error in the French version, but since I am a former French teacher, these are matters of interest to me.
In clause 2 of the bill, where small and medium enterprises are defined, a medium size enterprise is defined as follows in paragraph ( a ), and I quote:
"moyenne entreprise" Entreprise qui, avec les entreprises qu'elle contrôle et celles qui la contrôlent:
(a) soit compte au plus cent, mais moins de cinq cents, employés-
There seems to a problem with the wording. My understanding of this section is that a medium size enterprise is an enterprise that has more than 100 employees and fewer than 500. That is what is meant.
In paragraph (b), there is also a reference to a medium size enterprise that has an activity other than manufacturing, an enterprise that has more than 50 employees but no more than 500 employees. We should say fewer than 500 employees. I therefore suggest that the hon. member check the wording of clause 2 and perhaps make appropriate corrections that would improve the clarity of his bill.
A few moments ago I said we had no objections to the purpose of this bill which is to ensure that the banks serve small and medium size businesses, especially at this time of the year when most banks
file their financial statements and we see fantastic, even excessive profits being made by Canada's chartered banks.
This week, the Bank of Nova Scotia announced profits of over $1 billion. Last week, it was the Bank of Montreal announcing profits of more than $1 billion. We can expect that next week, at the latest, the Royal Bank will confirm a substantial increase in its profits.
When we look at the profits banks make on the backs of the little people, it stands to reason they should care about small and medium size businesses. We should not have to tell them so.
I also want to take this opportunity to point out the work done by the hon. member for Portneuf. Last week, together with colleagues from the other parties in this House, he presented a request to Canada's chartered banks, asking them to reduce the interest rates charged on credit card balances. We all know these rates are extortionate, and this is not an overstatement. In some cases, we would call it outright robbery. I think the banks will have to examine their consciences. If this debate does no more than recall these facts, it will have achieved something.
As for the bill itself, I would like to add a few comments. I said earlier that the wording of the sections defining small and medium size enterprises was not entirely satisfactory. And I think defining a small or medium size business on the basis of number of employees alone also creates problem. There should be other criteria such as turnover.
The bill gives the impression that it is up to the minister to grant or not to grant letters patent to a foreign bank to operate on the Canadian market. I think there may be a conflict of interest if the minister alone is responsible for the decision. There should be more details in the section that deals with the decision to be made by the minister.
In concluding, I wish to point out that this bill is not a votable item. We in the official opposition support the purpose of the bill, but we want to take this opportunity to point out to the members of this House, and especially to the government, the need for a broader debate on the activities of banks in Canada and especially on how their enormous profits are used.