Madam Speaker, in question period on February 2 I asked the finance minister what proof he could give the House that the monster merger between the Royal Bank and the Bank of Montreal would be better for small businesses, farmers and Canadian communities. I asked at the very least if he could promise it would not make things worse. The minister replied that the government had asked the task force on financial services to address service to small business in its deliberations.
His answer offers little reassurance to small business owners or farmers in my riding and in other parts of Canada. No one believes the task force should be allowed by the Liberal government to consider anything other than the interests of Bay Street and the agenda of the big banks. That is why the NDP has been calling for a parliamentary inquiry with full cross-Canada public hearings so the people of Canada can speak to elected MPs about their concerns regarding the bank merger.
It is pretty clear from the Canadian Federation of Independent Business study entitled “Credit Where Credit is Due” that small business is pretty close to fed up with the treatment it is getting from the big six. CFIB president Catherine Swift told the Globe and Mail that “the proposed merger between the Royal Bank of Canada and the Bank of Montreal is worrisome to small businesses because they want more, not fewer financial institutions to choose from. The prospect of reducing the already few players to even fewer is not a happy one”.
Eleven per cent of small business loan applications were rejected by banks last year. This is up from 9% ten years ago, a full 2% increase. Other studies show that only 3% of bank loans granted by the big six are under $100,000.
In addition the CFIB found that small business loans are priced well above loans to their larger counterparts and the gap is widening. Big loans to big business equal small service charges to big business, whereas small loans to small business equal big service charges to small business. Is this fair? I think not.
The greatest problems for small businesses occur when they have to deal with the very high turnover in account managers at the big six banks. Many firms deal with three or more managers in as many years. This situation is unlikely to improve if the monster merger and others like it are approved. The banks seem to be more interested in chasing risky international commercial loans than in servicing their small business customers in Canada.
We have no reason to believe that foreign banks will provide any more than minimal staff in our country. Meanwhile the bank merger could cost up to 30,000 Canadian jobs.
The finance minister made the bizarre and quite desperate accusation that somehow the NDP has found new friends in the banks. As my leader said, he should look in the mirror. His party accepted a quarter of a million dollars in donations from the Royal Bank and the Bank of Montreal last year, and he himself received a tidy $1,000 from Royal Bank chief executive officer John Cleghorn for his own campaign in addition to another $1,000 from Nesbitt Burns.
The government can make some choices. It can choose to approve the monster merger and reduce competition still further or it can pass a community reinvestment act and require the Canadian banks to do their job and service the credit needs of small businesses, farmers and communities in our country. If these minimum requirements are not met, perhaps issuing a bank charter to Canadians who want to meet these national objectives should be looked at.
If the chartered banks will not do what they are supposed to do for Canadians under their charter, maybe their charter should be given to those who will.