Mr. Speaker, I would like to thank government members for giving me the opportunity to finish my remarks.
I would caution those members of the Standing Committee on Finance who will be considering this bill, especially with respect to the issue of tied selling.
For greater certainty, we have to ensure that there is a level playing field for financial institutions. We have to be concerned that investment dealers, trust companies and insurance companies do not have the same rights to provide all of the services which banks do.
For instance, all those money machines out there are only banks, Mr. Speaker. You have to have a bank account in order to use them. These other institutions do not have that right. If a clause is put in which says that the more services that one uses with the bank the better deal one can get on one's rate for borrowing the money, that is giving an unfair advantage to the banks. To me that is very clear. It is unfair to the other institutions.
For the individual consumer in that particular case it might be fair. As my colleague from the Okanagan pointed out, there are two schools of thought concerning what happens when one bank or one institution ends up getting all the business and knows everything about that person. Either that is good or that is bad. If it wants to pull the plug it can pull the plug.
Clause 3 states that for greater certainty a bank or one of its affiliates may offer a product or service to a person on more favourable terms or conditions than the bank or affiliate would otherwise offer where the more favourable terms and conditions are offered on the condition that the person obtain a loan from the bank.
I am confused or call me stupid, but one clause says we get rid of tied selling, then it is replace with this type of tied selling. That allows tied selling. That is not cross selling. The banks can offer more services, thereby if they are allowed to give discounts they can give greater discounts than the other institutions. Therefore, it becomes tied selling and people will end up dealing more with the banks and it is a loss of revenue or business for the other institutions.
Cross selling is fine. I have applied for a business loan, they have approved it and then they ask me questions like "Jim, do you need a mortgage? Do you need something else?". When I tell them no, they say "Okay. If you did you know we could look at it favourably". That is suggestive selling. Or I just bought a house and they ask if I would like to get insurance on that house. Then I ask what is the rate. At least I get my mortgage and I am approved. It has nothing to do with my mortgage being conditional upon me also getting insurance. If they just suggest it, that is okay.
We do not know what goes on behind closed doors, but we did have witnesses come before the committee and say that this kind of thing is done by certain bank managers who are more aggressive than other bank managers. The law may say one thing but the application of the law by individuals in the workplace might allow them to do another thing. If they do another thing, then we end up with coercive tied selling and that concerns me.
I do not want to be a part of a 35th Parliament that passes something like this without proper debate, proper discussion, lots of witnesses in the committee so that we know exactly whether we are talking about cross selling or tied selling.
Maybe somebody should put forward an amendment that would allow insurance companies, trust companies, investment dealers that want to merge to go into the banking business as well. In that way they can compete with the banks and we will not have these kinds of debates. Then whatever the bank offers as a volume discount for having more and more services, these other companies would also be in a position to do the same thing.
Mr. Speaker, I want to thank you for your patience in listening to the different points of order. I want to thank the chief government whip for conceding the extra five minutes and the Parliamentary Secretary to the Minister of Finance for also agreeing to allow me
these few more minutes so that I can get the points across that I wanted to make. I thank everybody in the House.