Madam Speaker, I am pleased to have an opportunity to rise in the House today to debate Bill C-82 and to discuss its provisions and some of its impacts on consumers.
Having just listened to the previous speech in the House I will try to address the bill as opposed to having a diatribe about something that was not relevant to the bill.
The bill is about making important progress to ensure that our banking regime, our financial institution regime, is more responsive to the needs of consumers wherever they live in Canada, be it in Quebec or elsewhere.
This is part of an ongoing process undertaken by the Liberal government. We are trying to combine the best of our financial institutions. There are some positives we want to maintain as a society and as a government.
Our banks are successful corporations. They are strong. They are world leaders in finance. They provide financial stability to the country, far more so than the banking industry in many other countries.
Today the banks in Canada employ 500,000 people. They represent 3.5 per cent of the whole Canadian workforce. The financial services industry in Canada represents about 7.5 per cent of GDP. These are all important aspects of financial institutions in Canada and something we as a government and we as Canadians want to ensure continues.
However, we need to balance that as well. We need to balance that with the need to ensure that these financial institutions are serving consumers. We need to balance that with the need to protect consumers who use our financial institutions from potential abuses. Regardless of their socio-economic status, we also need to ensure that consumers of all stripes have access to our financial institutions.
What this bill is about is combining those two things, maintaining what is best in our financial institutions but also ensuring that we have the appropriate protection for consumers built into legislation.
This is not something that is just happening today. It is something we have done all along. I had an opportunity, when we dealt with the issue of access to capital as part of the industry committee's examination of the banking industry, where we worked as a government to institute changes with the banks so that there would be better protection for consumers. Coming out of that process was some progress. We were able to put in place a number of tools to help our small business community to have better access to capital. One of the tools was ensuring that the banks would have to establish a code of conduct that governs how they deal with their small business customers.
I would say to all of those small business men and women who may be watching today, when they are talking to their account manager at their local branch they should ask for that code of conduct. It sets out the rules on how the banks are going to deal with their accounts.
A second tool that was put into place was an alternative dispute resolution system. If someone is not pleased with the process that is taking place with their account manager there is a mediation process available at their banks and they should ask to use it.
As a third tool, all the financial institutions, the banking institutions anyway, have an ombudsman in their operation to whom the consumer can appeal his or her problem if they are not pleased with the decision of the account manager. The banks have come together now and have an industry-wide ombudsmen consumers can appeal to if they are not satisfied with what is happening in the institution.
The fifth tool that we have been able to put in place is the requirement that the banks provide to the government and to the people of Canada quarterly statistics on their small business lending. In fact, I believe it is close to 19,000 different stats that are provided each quarter on small business lending.
Some of these tools that we were able to develop through the industry committee and working with the financial institutions are finding their way into the legislation that we are debating in front of the House today. The code of conduct is one where the rules have to be set out up front and in writing so that the consumer understands exactly what the rules are and that the institutions understand exactly what the rules are that they are going to play by.
We see those types of tools coming out in the privacy code that is being suggested in this piece of legislation. We are seeing, in the whole issue of tied selling, that there will be a code of conduct that outlines what is and what is not permissible, that it is public and that the consumer knows in advance.
We also see the use of the ombudsmen in this piece of legislation where if the consumer is not satisfied on the issue surrounding tied selling, that the institution is following its code of conduct, then the consumer should appeal it to the ombudsman.
The third tool that we see coming out in this piece of legislation as well is the whole issue of reporting. The financial institutions will have to report the number and nature of the complaints they are receiving on the issue of privacy and on tied selling so that there can be public accountability of what they are doing.
It has been mentioned by a number of speakers in the House that this bill is fairly technical in nature in the changes that it is proposing. However, there really is some important application to what everyone will actually see in dealing with their financial institutions.
First is the whole issue of privacy and privacy protection. Most consumers who deal with financial institutions are concerned when they see the array of computers and the massive amount of information that banks have on individuals. They are rightly concerned that the information is going to be maintained in a confidential nature. None of us would like that type of information to be exchanged with phone marketers or whoever else it might be given to.
This bill calls on the financial institutions to develop a public code of conduct as to how they will deal with privacy issues. It calls on them to publish that code. It calls on the financial institutions to establish a method by which consumers can complain and put forward their concerns that the privacy code is not being maintained and to make those types of complaints and concerns public. That is positive. Consumers want to see their privacy protected.
Another issue that is being addressed in the review of the banking and financial services industry is disclosing the cost of credit. Over the years Parliament has moved and financial institutions have moved on the need to disclose the cost of credit. That is very important to someone who is obtaining a loan or a lease, although I believe more work has to be done in terms of disclosure. The consumer needs to know what will be the actual cost.
Although we have had disclosure laws for some time, this will make those disclosure laws more uniform so that a consumer can make an informed comparison between the disclosure of one company and the disclosure of another company, or between one industry and another. That is something which is being taken on with this review and it is positive.
Then there is the whole issue of tied selling. That is of real concern to consumers. All of us would agree that it would be inappropriate if somebody from a financial institution said to someone "I will approve this loan only if you buy something else from me". That is the type of tied selling which we do not want to see. It is different from cross selling and up selling, which is quite appropriate and a normal business function. However, we do not want to have tied selling.
That is why I am pleased to see that this legislation contains an amendment to the Bank Act which would prohibit tied selling if the self-regulation that I talked about a little earlier was not enough, that being the development of a published policy, a public complaints procedure, an appeal mechanism to an ombudsman and a reporting by the ombudsman on what he or she believes are infractions. If we find that is not going to be enough, if we find that is not going to ensure that this practice does not become widespread, then there is some legislative fallback position that we are able to provide ourselves.
This legislation will lead to an entry policy review, which the minister has committed to completing in this calendar year. We will take a look at streamlining the procedures by which foreign banks can operate in Canada. Most of us would see that as being positive. If we can increase the amount of competition in the financial services industry in this country, most people believe that will lead to improved service, improved access to capital and a whole range of good things that will come through increased competition. Most people in Canada would see that as being positive. I am pleased to see that the Secretary of State for International Financial Institutions is proceeding with that review and will complete it in fairly short order.
There are a couple of things the minister was able to announce which came out of the review he has been undertaking and the discussion paper which he put forward some months ago. One of them has to do with the access to basic financial services.
I think there are a lot of consumers who have been frustrated in dealing with their local financial institution when they try to cash a cheque and do not happen to be at their own institution or they try to deposit a cheque and then find out that the funds will be held and they cannot get access to the funds for a week or two. Perhaps they are trying to open an account and for some reason there are arbitrary rules in the institution and they will not be allowed to open an account.
Often it is low income Canadians or those who are not in the workforce who have great difficulty accessing these financial institutions. It is not appropriate. There should be equal access to financial institutions.
I was pleased to see as part of the discussion paper and in discussions with the financial services community that a number of standards have been put forward and the institutions have agreed to work toward and implement within their branches things like lessening the identification requirements, explaining clearly whether a hold funds will be placed on the individual's account, eliminating employment as a condition of opening an account, ensuring that there is no minimum deposit requirement in order to open an account, training of staff to be more sensitive when dealing with consumers who might be opening a small account. I think these a positive things that needed to be worked out and I am pleased to see that has been done.
As part of the discussion paper some important work has been done which has been discussed in the House, the need for the banks and other financial institutions to proactively advertise their low cost services. We heard that in the discussion on credit cards where
many institutions have low cost credit cards. When it is pointed out some would say they did not even know that existed.
I was pleased to see that in response to the discussion paper the financial institutions have made a commitment to proactively advertise their low cost services. I look forward to seeing that implemented and the changes taking place.
In conclusion let me say that with the legislation the government is moving along the road to find a balance between keeping those things about our financial services industry that are strong and helpful to the country and to the citizens of our country. We want to make sure that financial stability is maintained and that employment opportunities that are presented by financial institutions are maintained.
We also want to make sure it is done in a way which will protect individual consumers and will give consumers the right to access those services.
This has been an ongoing process by the government over the last three and a half years and progress is being made. I am sure the task force which was struck to look at future changes and at our financial services sector going into the 21st century will continue. I look forward to its findings.