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.