Debates of June 19th, 1996

Financial Institutions

[Doug Peters, Liberal, Secretary of State (International Financial Institutions)]

Madam Speaker, I am pleased to table a consultation paper on federal financial institutions legislation which presents a series of proposals to safeguard the interests of consumers, to make improvements to the legislative and regulatory environment in which the federal financial institutions operate, and to start the process of fundamental thinking about the framework the sector will require as it moves through times of rapid change into the next century.

Canadians can be proud of having one of the strongest financial systems in the world, a system that is efficient, effective and stable. It offers a good balance between competition and the stability of financial institutions. We want to continue to make sure this is true.

The federal government monitors developments in the financial sector and looks for ways to improve the system. In 1992 many of the restrictions preventing financial institutions from fully competing with each other were removed. The general consensus appears to be that these changes produced positive results.

When the 1992 legislation was passed it was agreed that the legislative framework should be revisited in five years. After extensive consultation and analysis, the government has concluded that the framework established in 1992 should be kept largely intact. There is room, however, for a number of important adjustments to be made.

We want to do the following. We want to strengthen consumer protection. We want to ease the regulatory burden on financial institutions and keep the legislation current with evolving trends. We also want to ensure that we raise our eyes to a broader vision of the future.

We recognize that the financial sector operates in a rapidly changing environment in Canada and abroad. Fundamental questions have been raised by the stakeholders in consultations. These questions, mainly involving the structure of the industry and the role played by financial institutions, must be addressed to ensure that we continue to have a strong and secure financial sector that supports economic growth and job creation.

The issues raised are complex and they must be addressed in a broad context. A task force on the future of the Canadian financial services sector will be established to provide advice to government on public policy issues related to the development of an appropriate framework.

I will ask the task force to consider a number of factors in its deliberations. First, what changes to the framework are necessary to ensure that the financial sector contributes to economic growth and job creation? Second, how can this sector meet the emerging needs of Canadian business and consumers? Third, how to promote competitiveness and efficiency in the sector. Fourth, how to foster innovation. Finally, all of this is done while maintaining the safety and soundness of the Canadian financial system. We will provide further details of the task force mandate and composition in the fall.

Ultimately, the question I want addressed is what should be done to make sure that Canada continues to have one of the best financial systems in the world. The study will shape the next round of amendments to the legislation which the government proposes take place no later than five years after the passage of the 1997 legislation. The government will be counting on this group for

dispassionate advice based on the best interests of the Canadian economy.

This marks an appropriate point to discuss in some detail a set of important proposals in the paper, the proposals to further safeguard the interests of consumers. This is a matter of significance to the government.

We recognize the efforts made by the financial institutions to address privacy concerns over the past few years and plan to build on their successes. We propose to introduce regulations governing the use of consumer information by federal financial institutions.

The government will work with the banks, trust and loan companies to simplify and improve methods of providing information about their fees. Financial institutions will also be required to provide more detailed information about the cost of credit.

We will work with consumer and community groups and with the financial institutions to develop and put in place a strategy to improve the access of low income Canadians to financial services.

The government will also work with stakeholders to determine whether there is a need for new measures protecting consumers from abusive tied selling.

In addition to these significant consumer protection initiatives, the paper contains important initiatives to streamline and clarify regulatory requirements, and to minimize delays when regulatory approvals are required.

The paper also recognizes the importance we attach to reviewing the regulatory structure supporting the payment system. A safe and sound payments system is a vital part of the operations of a modern, sophisticated economy.

The Department of Finance will establish an advisory committee to study payment systems issues. The committee will provide important input to the broader work of the task force on the development of a suitable framework for the financial sector in the 21st century. With regard to the legislative proposals contained in this paper, the government will begin a consultation process. Both the House Standing Committee on Finance and the Senate committee on banking, trade and commerce will hold hearings. I look forward to their input.

I urge hon. members to read this paper and to become familiar with the proposals. I will be pleased to receive comments before we move to legislation in the fall.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, as I was saying earlier, we in the official opposition can only deplore the many delays surrounding the tabling of the white paper on the review of the Bank Act.

We also deplore the fact that the secretary of state is once again turning over the work he should have done over the past year and a half with respect to the review of the Bank Act to select committees, which will probably work behind closed doors, a habit the government took to in the taxation review process and in the scandal surrounding the transfer by family trusts of two billion dollars to the U.S., tax free.

In conclusion, the official opposition will be extremely vigilant when it comes to this important matter of the review of the Bank Act and, in particular, the federal government's respect of provincial jurisdictions, the effects of such a review on the concentration of the financial market, and the real defence of the interests of consumers in Quebec and in Canada. Quebecers and Canadians must and can count on the official opposition, on the Bloc Quebecois, to defend their real interests.

[Philip Mayfield, Reform, Cariboo—Chilcotin, BC]

Madam Speaker, members of the Reform Party of Canada welcome the opportunity to respond to the minister's long awaited white paper on the review of financial institutions legislation. We all know how important a stable, efficient, competitive and innovative financial system is to a complex economy like Canada's, so the impending review is viewed with a great deal of seriousness.

The four pillars of the financial sector, banking, insurance, trust companies and securities dealers, have crumbled as deregulation and technological progress has blurred the lines of distinction. The banks have been applying pressure ever since to enter into other sectors such as retail insurance, auto leasing and increasing their interest in the securities market.

Further deregulation and the subsequent increase in the size of the banks, however, could reduce competition in the financial sector and hurt consumers.

Reform believes that the protection of the consumer and a more competitive environment are the two key elements that must be addressed in this review. While Canadians acknowledge that we have a strong and stable financial system they are clearly suspicious of the power of some of our institutions.

While we commend the minister for placing the interests of consumers at the top of his list of priorities, we believe that in order to strengthen the confidence of consumers, these issues must remain paramount and the process must be, above all, transparent. Canadians must be able to see the process in order to put faith in it and to be certain that all interests were considered.

A special concern for me is the issue of privacy and how the banks handle confidential personal information. Canadians are extremely concerned about the subsequent use of personal information that they must provide to financial institutions in the course of

doing business. I hope that this important issue will be given serious consideration .

Canadians are more knowledgeable about their financial system that many in the industry give them credit for. They realize that banks are more than a place to keep their money or to cash a cheque. This was evident in our party's recent assembly in Vancouver where the grassroots passed the following resolution:

"Resolved that the Reform Party ensure that federal legislation on financial institutions protects Canadians from experiencing a monopoly of financial services by any one sector. Particularly, banks should not be allowed to further enter into the insurance industry or the auto leasing business.

"The Reform Party further recommends that a moratorium be placed on any further, partial deregulation until a thorough review of the entire financial system with the aim of increasing competition within the financial sector. Such a review must also assure the stability of the financial system and retain prudential regulation for the protection of consumers".

We need to know a good many things. How do financial institutions interact? How do they operate in relation to other sectors of the economy? What are the strengths and weaknesses of the current regulatory structure? Not only will these answers reveal whether true competition exists within the banking sector and thus whether they should be allowed to expand into other financial services, the answers will determine the veritable strength of the financial sector as it heads into the 21st century.

As lobbyists from all sides pressure members of Parliament to take sides and others try to frame the issue within the overtly political constraints of a war between big and small business, the challenge will be to keep our eye on the ball, to ensure true competition exists and is free to function within the marketplace, that stability is maintained in the respective financial sectors and a prudent regulatory structure is in place to protect the consumer. If the bottom line is met, Canadians and the Canadian economy will indeed emerge as winners.

Committees Of The House

[Charles Caccia, Liberal, Davenport, ON]

Madam Speaker, pursuant to Standing Order 108, I have the honour to present, in both official languages, the second report of the Standing Committee on the Environment and Sustainable Development.

The committee has examined federal regulations on biotechnology and, in light of the testimony from various witnesses, has unanimously decided in the best interests of all parties concerned that:

The government defer any decision on the new biotechnology part of the Canadian Environmental Protection Act and maintain the existing provisions regarding the Canadian Environmental Protection Act until such time as the committee has completed its study. A government response is requested pursuant to Standing Order 109.

I thank the witnesses who appeared before the committee and our staff and members on all sides who have worked in the spirit of true parliamentary co-operation.

[Patrick Gagnon, Liberal, Bonaventure—Îles-De-La-Madeleine, QC]

Madam Speaker, pursuant to Standing Order 81, I have the honour to present, in both official languages, the second report of the Joint Standing Committee on Official Languages concerning application of Part VII of the Official Languages Act.

Pursuant to Standing Order 109, the committee requests a comprehensive response to the report within 150 days.

I take this opportunity to thank the various witnesses who appeared before the committee.

Justice And Legal Affairs

[Shaughnessy Cohen, Liberal, Windsor—St. Clair, ON]

Madam Speaker, I have the honour to present, in both official languages, the first report of the Standing Committee on Justice and Legal Affairs.

Pursuant to Standing Order 108(2), your committee has agreed to the first report of the subcommittee on national security.

I also have the honour to present in both official languages the second report of the Standing Committee on Justice and Legal Affairs. Pursuant to the order of reference of June 18, 1996, your committee has considered Bill C-45, an act to amend the Criminal Code, judicial review of parole ineligibility, and another act.

Your committee has agreed to report it with out amendments.

[Marlene Catterall, Liberal, Ottawa West, ON]

Madam Speaker, I also have the honour to present the 23rd report of the Standing Committee on Procedure and House Affairs concerning the evaluation of the pilot project on Part III of the estimates.

I also have the honour to present, in both official languages, the 24th of the Standing Committee on Procedure and House Affairs in relation to consideration by the committee and through its subcommittee on the business of supply on the estimates process.

Privilege

[Val Meredith, Reform, Surrey—White Rock—South Langley, BC]

Madam Speaker, I rise today on a point of privilege. I feel it is incumbent upon me as a member of Parliament to bring to your attention a matter of the most serious importance.

The following description of events is lengthy and complex but will clearly show that actions taken by the Security Intelligence Review Committee are an affront to the House and amount to the utmost disrespect for Parliament.

Page 123 of the twentieth edition of Erskine May defines contempt as follows:

It may be stated generally that any act or omission which obstructs or impedes either House of Parliament in the performance of its functions, or which obstructs or impedes any Member or officer of such House in the discharge of his duty, or which has a tendency, directly or indirectly, to produce such results may be treated as a contempt even though there is no precedent of that offence.

Furthermore, in Joseph Maingot's Parliamentary Privilege in Canada contempt respecting documents is defined as follows:

Similarly, should any person present documents to to a committee of the House of Commons which have been forged, falsified, or fabricated with intent to deceive such committee or the House, or, to be privy to such forging or fraud, this will constitute contempt of Parliament because it is an obvious affront to the House of Commons to present it with such documents. The House of Commons is not only entitled to but demands the utmost respect when material is placed before it for its scrutiny, investigation or study.

The following description will show that SIRC's actions led directly to the Solicitor General of Canada's unknowingly tabling on December 15, 1994 a report contemptuous of the House.

On December 15, 1994 the SIRC report on the Heritage Front affair was tabled in the House of Commons by the Solicitor General of Canada.

In chapter 8 of the report the following is written: "On October 17, 1989 the service decided to formally investigate the alleged $45,000 contribution. CSIS said that they could not go back to the informant, as all contacts had ended on December 31, 1988. The service authorized a three month, level one investigation entitled "LNU/FNU (Unknown Contributor(s) to Preston Manning's Electoral Campaign)". The service cited section 12, paragraph 2(b) of the CSIS Act as the legal basis for the investigation".

On December 16, 1994 SIRC appeared before the national security subcommittee. I asked the following of SIRC. I quote page 5:32 of the Minutes of Proceedings and Evidence of the Subcommittee on National Security: ``Can you have your officials go back to CSIS and have them examine the hard copy of the original authorization of the level one investigation on the Reform Party and a foreign government, not just the corrected copy? Specifically, can your employees examine the caption on the file?''

SIRC member Michel Robert responded: "About this specific question, the last one, I do not know. I will examine that. I am not in a position to answer now but will certainly look at the files".

In other words, Mr. Robert mentioned nothing about knowing of any name change in the investigation entitled "LNU/FNU (Unknown Contributor(s) to Preston Manning's Electoral Campaign)" when the SIRC report on the Heritage Front affair was tabled in the House of Commons on December 15, 1994 by the Solicitor General of Canada.

However, in a letter dated January 27, 1995 from Maurice Archdeacon, executive director of SIRC, Mr. Archdeacon informed the member for Scarborough-Rouge River, the chair of the committee on national security, that the file caption was indeed changed: "The caption she referred to for the targeting authority dated October 17, 1989 was Preston Manning. The caption was revised on March 30, 1990 to state: `LNU/FNU (Unknown Contributor(s) to Preston Manning's Electoral Campaign)"'.

On March 30, 1995 the Solicitor General of Canada appeared before the Standing Committee on Justice and Legal Affairs accompanied by his deputy ministers, including Ward Elcock, the director of CSIS.

Mr. Elcock was asked why SIRC was unaware that the file was originally in Mr. Manning's name. Mr. Elcock's response, according to the Minutes of Proceedings and Evidence of the Standing Committee on Justice and Legal Affairs, Issue 95, March 30, 1995,

pages 95:17 and 95:18 was: "I don't know that in fact that SIRC was unaware. I don't know why they would not have put it in their report or would have chosen not to do that. That is SIRC's business and you would have to address that question to SIRC".

After further questioning about whether SIRC knew about the investigation name change, Mr. Elcock went on to say: "My belief is that they did have that information, but I will certainly check that for the hon. member".

The following day, on March 31, 1995, I wrote to the hon. Jacques Courtois, chair of SIRC, asking for clarification of Mr. Elcock's comments of the previous day: "Was any member or employee of SIRC aware that the original TARC investigation launched on October 17, 1989 [was] in the name of Preston Manning and not "LNU/FNU (Unknown Contributor(s) to Preston Manning's Electoral Campaign)" when the Heritage Front report was tabled December 9, 1994?"

Mr. Archdeacon responded for Mr. Courtois in a letter dated April 7, 1995. He said in his reply to my letter that contrary to what the SIRC report and committee testimony from SIRC members had led the House to believe, SIRC did indeed know of the investigation's name change at the time of the tabling of the report by the solicitor general: "SIRC staff saw the original title of the targeting authorization as well as the corrected titled and all other documents pertaining to this investigation".

The evidence presented bears witness to the fact that the actions taken by SIRC are in contempt of the House. SIRC deliberately omitted from its December, 1994 report the fact that the name of one of CSIS's investigations was originally entitled "Preston Manning".

For whatever reason, the caption of the TARC investigation was changed to "LNU/FNU (Unknown Contributor(s) to Preston Manning's Electoral Campaign)" two months after the expiration of the investigation.

These facts are by any measure crucial and their absence from the report is inexplicable and deliberately contemptuous. The actions taken by SIRC amount to an attempt to mislead a minister of the crown and to obstruct the House by offering admittedly incomplete information.

This should have been the conclusion of my question of privilege, as the evidence is clear. However, over the past two months SIRC and CSIS have provided new information that is completely contrary with their own evidence to this point.

In a letter sent to CSIS on November 9-

[The Acting Speaker (Mrs. Ringuette-Maltais)]

Could the hon. member please be brief and show the House how her privilege in the House has been breached.

[Val Meredith, Reform, Surrey—White Rock—South Langley, BC]

Madam Speaker, I am trying to but the evidence is on record in minutes of meetings. I would like to bring it to the attention of the House. The Solicitor General of Canada has been mislead and tabled a report that is misleading to the House. If I may continue, Madam Speaker?

[The Acting Speaker (Mrs. Ringuette-Maltais)]

Does the hon. member consider that her privileges have been breached?

[Val Meredith, Reform, Surrey—White Rock—South Langley, BC]

Madam Speaker, I do I am trying to outline the reasons and the evidence that support that breach.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

I remind the hon. member to please be brief.

[Val Meredith, Reform, Surrey—White Rock—South Langley, BC]

Madam Speaker, in a letter sent to CSIS on November 9, 1995 the subcommittee asked questions about the caption on October 17, 1989 targeting authority, originally entitled "Preston Manning".

Among the many questions asked were: "How was a caption change made on the form 4002? Was the original form altered or was the original form destroyed and a new backdated and reinitialled form created?" The subcommittee also asked questions about the November 10, 1989 transit slip, form 3040, from the chief of counter-intelligence, general desk, to the general director of counter-intelligence.

Specifically, questions were asked about item five of the form which stated: "Caption is considered appropriate under policy provisions". Among questions asked were: "Can you provide the subcommittee with an explanation of this assertion in light of the fact that at the time the caption read `Preston Manning' and was not changed until March 30, 1990? If the caption was"-

[The Acting Speaker (Mrs. Ringuette-Maltais)]

This is the second time I am asking the hon. member to please point out immediately how the point she is raising occurred.

[Val Meredith, Reform, Surrey—White Rock—South Langley, BC]

Madam Speaker, I did not realize there was any limit on a question of privilege.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

Can the hon. member put forth her question of privilege now.

[Val Meredith, Reform, Surrey—White Rock—South Langley, BC]

Madam Speaker, I am trying to put forward my question of privilege. If you want-

[The Acting Speaker (Mrs. Ringuette-Maltais)]

The House will now resume with presentation of committee reports.

Committees Of The House

[Bill Graham, Liberal, Rosedale, ON]

Madam Speaker, I have the honour to present, in both official languages, the report of the Standing Committee on Foreign Affairs and International Trade in relation to small and medium size enterprises and their access to export markets.

Privilege

[Jim Silye, Reform, Calgary Centre, AB]

Madam Speaker , I wish to point out that in my two and a half years here I have heard many questions of privilege. Each member has been given the courtesy, the time, the respect and the silence to present their question of privilege.

Members of both the government and the other party are concerned about the length, although it was never brought up before. I do not think the power of the Chair is being applied fairly and evenly. I would expect the Chair to interpret the rules on our behalf in the same way as was done for previous members. We should be given the same respect. I feel that our colleagues should be able to-

[The Acting Speaker (Mrs. Ringuette-Maltais)]

The Chair applies the rules equally, period.

We will now return to Orders of the Day.

[Val Meredith, Reform, Surrey—White Rock—South Langley, BC]

Madam Speaker, I would like to know where in our rules there is a time limit on a point of privilege and why I have been denied my privilege of giving the evidence to support my point of privilege.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

The Chair has ruled. You had limited time and I have asked you, at least twice, to be direct and to point out in a succinct way your point of privilege.

We will now go to Orders of the Day.

[Ray Speaker, Reform, Lethbridge]

Madam Speaker, I rise with respect to a matter of privilege in the House. It is stated very clearly in Beauchesne's that one of the responsibilities of the Speaker on a matter of privilege is that the Speaker must carefully hear the total story with respect to the privilege so that a judgment can be made whether a question of privilege exists. In order to do that, full and detailed information must be provided.

The hon. member who is making the presentation has to go into the details of the matter in order to completely describe the point of privilege. I know that in her presentation so far she has presented some of the preliminary information, but has not clearly indicated what the privilege is.

Madam Speaker, I refer you to citation 26(3) of Beauchesne's where it states:

When a question of privilege is raised the Speaker's function is limited to deciding whether the matter is of such a character as to entitle the motion, which the Member who has raised the question desires to move-

That means you must look at it in its entirety. Therefore, I would appreciate the Speaker's reconsideration.