Mr. Speaker, more than anything else, Bill C-82 is a technical revision of the Bank Act. It does not contain major changes such as the deregulation of financial institutions, for example, allowing banks to sell insurance and the merger of major banks.
The government does, however, propose some legislative novelties, one might call them, which, although they do not go as far as the white paper and the Liberal finance committee report, do merit our further attention.
In addition to technical amendments to the Banking Act, Bill C-82 seeks to modify or develop legislation on two main themes: enhancing consumer protection, on the one hand, and lessening the burden of regulation imposed on financial institutions on the other. It must be noted that implementation of a new access system for foreign banks will, it seems, come in a separate act slated to come out by the end of the year.
The government will adopt clauses on the protection of confidential information, better information on the cost of credit, and protection of consumers from tied selling. After discussions with the government, the banks will take a number of steps to improve access by low-income individuals to basic financial services, as well as information on banking services which, we must admit, have been virtually non-existent until now, possibly to the detriment of users of banking services. Banks must also adopt a policy on tied selling, and set up mechanisms to handle complaints on this. Some banks have already taken such initiatives.
As for tied selling, the government is naive almost to the point of complacency. These measures apply only to banks, while the same thing is not required of other financial institutions. This is because banks fall under federal jurisdiction, while the other institutions, such as insurance companies, come under provincial jurisdiction. The federal government should let the provinces set the rules and require its federal institutions to adhere to the provincial legislation. This is the opinion of the Bloc Quebecois. That way, the legislation would not have the double standards it does at the moment.
The government also states that the clauses to amend the Bank Act so as to prevent high-pressure tied selling will come into effect only if they prove necessary. Banks are being asked to create their own internal complaint handling system, and the act will apply only if this proves insufficient-but using what criteria?
The government is therefore doing nothing concrete about tied selling. What is proposes to do eventually is not even the right thing, in our opinion. It just refers to tied selling in order to gain brownie points as the elections come closer, but in actual fact it strikes us that this is nothing but hot air.
If the government wants to do something concrete, it should make the banks subject to the same legislation as financial institutions that come under provincial jurisdiction, which offers consumers genuine protection.
We deplore the fact that the federal government is trying to interfere, through the back door, with areas under provincial jurisdiction. Under sections 254 to 259 of the Insurance Companies Act, an insurance company with a federal charter or a foreign company regulated under this act is currently prohibited from selling its policies in Canada to another insurance company that is provincially regulated.
Since most foreign insurance companies operate in Quebec under a federal charter, Quebec insurance companies cannot buy their policies when these companies withdraw from the Quebec market.
This is unfair to Quebec insurance companies for the following reasons: first of all, they cannot freely enter into transactions with another insurance company that is federally regulated, even to purchase a block of policies that are all held by Quebec policy holders. Second, it is against the spirit of NAFTA because through Ottawa, artificial trade barriers are being created in Quebec. Third, banks and trust companies do not have the equivalent in their legislation, so that a federally regulated bank or trust company may buy blocks of business from their provincially chartered counterpart.
In other words, Quebec insurance companies are not treated as well as foreign companies and this, in their own country. In a joint brief dated February 1996, the Canadian Life and Health Insurance Association, the Canadian Bankers Association, the Insurance Bureau of Canada, Canada Trust, the Trust Companies Association of Canada and the Credit Union Central of Canada-this is starting to look like quite a crowd-asked the federal government to allow, with the approval of the minister, the transfer of policies in Canada
from a federal insurance company to a provincial insurance company.
The Government of Canada did not respond to this request in Bill C-82, thus perpetuating the unfair treatment of provincially chartered insurance companies like those in Quebec. If nothing is done, C-82 will continue to restrict the opportunities for expansion of provincially regulated insurance companies, so that many will prefer to obtain a federal charter. Let us not forget that insurance is a strictly provincial matter. The federal government has always tended to forget that.
The reason the federal government is prohibiting the sale of policies by a federally chartered company to a provincially chartered company is that the latter is outside its control and supervision. On the other hand, the federal government is permitting the sale of blocks of insurance policies by a provincially or federally chartered company to a federally chartered company-the reverse is not permitted-on the grounds that the latter is under its supervision and must be a member of the Canadian Life and Health Insurance Compensation Corporation.
Clearly, it is a one way street: what goes one way does not go the other. It has been this way since 1867, always to the federal government's advantage. Over time, companies, and especially the major ones, end up with only a federal charter, because a provincial charter penalizes them by preventing them from acquiring blocks of policies from a federally chartered company.
The provincial market, which is shrinking as a result, may well disappear. Sooner or later, if there are no more companies with a provincial charter, the province, as we know, will become a redundant lawmaker, and this is how the federal government will take total control of an area that, under the Constitution, comes totally under provincial jurisdiction.
In such a situation, the Bloc certainly has nothing against the protection of consumer information, but this is a matter of civil law, an area of provincial jurisdiction. Quebec already has legislation on consumer protection, on the protection of personal information, on insurance and on market intermediaries, which is to be reviewed shortly.
The aim of the federal government is to be able to make additional regulations in an area of jurisdiction where it has no business, by duplicating and overlapping what already exists. In this regard, federal policy never changes.
This is to be found in section 459 of the Bank Act, which is amended by clause 55 of Bill C-82, which is before the House today. The government claims in its fine speeches to want to eliminate overlap and allow the level of government best suited to provide the public with the services it needs to do so. In fact, however, it continues to trample all over fields of provincial jurisdiction.
It cites an agreement between the provinces in order to legislate in this area. That is not what federalism is about. It is not because ten provinces agree on a subject that the federal government has the right to make laws and regulations in an area of jurisdiction that is not its own.
The federal government claims with Bill C-82 to be improving access to basic financial services for low income Canadians. For instance, only two pieces of identification instead of three would be required to open an account or cash a cheque, photo ID being considered desirable but not mandatory. This is a mere facade, since the problem remains.
The federal and provincial governments forbid banks to ask for some identification that most Canadians carry, including their social security number. The solution would be to think of a piece of ID that everyone has and that banks are allowed to ask for to check the identity of individuals. More often than not, the only cards they can ask for are credit cards, which very few low income people have.
Banks are not allowed to impose undue pressure on their clients, but the legislation does not say what constitutes undue pressure. In any case, it is up to the provinces to define this undesirable practice, as consumer protection is a provincial responsibility. However, the federal government reserves the right to make regulations in an area under provincial jurisdiction where there is already duplication and overlap, as pointed out earlier, in the case of Quebec. This is unacceptable to us, Bloc members.
In addition, Bill C-82 makes a distinction between undue pressure and favourable tied selling in subsections 459.1(2) and (3).
This policy raises major questions, since the goods that are tied seldom have the same life or expiry. This will make control extremely difficult, in a word, it cannot work. Why not require banks to comply with provincial consumer protection and tied selling regulations?
We know that, for the federal government, streamlining and duplication are synonyms, while harmonization really means interference. But this must stop, particularly if the government wants to fulfil the commitments made in the last speech from the throne. We feel that Bill C-82 provides the government with a good opportunity to show that it intends to fulfil its fine promises by not legislating and by not adopting regulations that duplicate and overlap what is already being done at the provincial level.
The federal government is imposing on banks standards that are not imposed on other institutions that come under provincial jurisdiction. Given that all these financial institutions are ultimately competing against each other, the only way to ensure they are subjected to the same rules is to let the provinces decide how these
institutions, including banks, must deal with the issue of consumer protection, including complaints relating to tied selling.
The Insurance Brokers Association of Canada fears that federal regulations in the financial planning sector would interfere with what is already being done. According to the association, the code of ethics on the disclosure of personal information, which is currently adhered to on a voluntary basis, is too soft on banks, given what is required of intermediaries in the marketplace.
The Bloc Quebecois expressed a number of reservations regarding Bill C-82. The government should correct the irritants that we mentioned today. Then, and only then will we be able to support Bill C-82.