I am not saying this simply to get attention, I just think this might be my lucky day and that my luck will benefit poor communities.
Let me start off by saying that this bill is a concrete step against poverty. As MPs, we all know there is a direct link between poverty and access to credit.
In the United States, a country where, we must admit, capitalism and free enterprise are thriving, they have had since 1977, that is for the past three decades, the Community Reinvestment Act, which makes it compulsory for banks to invest in disadvantaged communities.
What is this all about? The six major chartered banks listed in schedule I of the Bank Act have the privilege to earn big profits using the money deposited by their clients. What we are asking for is some balance between the deposits they receive and the loans they make to the community.
We are not challenging the fact that banks are trying to make profits. If they make money by playing the bond market smartly or making a wise use of any other financial vehicle, we understand. What we do not understand is that in 1998 banks are no longer present in poor communities.
Hochelaga—Maisonneuve is a case in point. This once thriving blue collar community is now hurting. Elderly people there tell me that in the 1960s there were 10 banks in their community. I challenge you to guess how many there are today. There are two. That is what has to change.
The banks, which are making record profits, have entered the global market, with 40% of their assets coming from foreign investments at the present time. It is not right that banks are not present in communities needing their help.
In a community such as mine, Hochelaga—Maisonneuve, housing is where banks could invest and get involved. Eighty-six per cent of my constituents rent their accommodation. The banks' requirements are such that it is extremely difficult for anyone wishing to buy property to get a loan. This must end.
In the United States, the equivalent of our superintendent of financial institutions tables an annual report in Congress on the efforts banks make in disadvantaged communities. This report looks at loans made for community development purposes, loans to small business and loans to individuals.
In the case of loans to individuals, there are figures for low, middle and high income earners, by urban census area.
Here is what I am asking of all parliamentarians today. At a time when the Bank Act is being debated, at a time when a five-year review is obligatory, at a time when the Minister of Finance has set up a task force, is it not incumbent upon us as parliamentarians to send a very clear message in the end to the effect that we want the philosophy behind the Community Reinvestment Act to be part of our concerns as parliamentarians?
This is not a partisan issue because, regardless of which side of the House we are on, there is always a need for banks to get involved in the community. The Reform Party and the Bloc Quebecois each represent a part of this constituency. The same is true of the New Democratic Party and the Progressive Conservative Party, not to mention the government party.
Why should banks get involved in their communities? The most obvious reason is of course that they can afford it. My bill does not call for this social involvement of banks across Canada to take a specific form. Within each of their communities, banks should work with industry, community groups, elected representatives, the bone and sinew of the community, to ensure that investments can be made which will benefit community development. That is the philosophy behind community reinvestment.
Let me remind you that, in 1992, banks made approximately $2 billion in profits. This year, profits will likely be closer to $8 billion. So, we are in a situation where, as I said, the effort asked of banks is not an unreasonable one.
Banks should get involved in their communities because they operate in an extremely sheltered environment. The socio-economic studies chair at UQAM reported that 90% of loans issued by banks are secured by one level of government or the other and that 92% of all banking activities in Canada are conducted by the six major schedule I chartered banks. In a word, banks make profits and operate in a sheltered and concentrated environment.
The good news for bank shareholders is that retained earnings are higher than they have ever been in recent years. The retained earnings of banks have grown by 18% per year. Few industries in our society can match that.
UQAM is a breeding ground of ideas, which has enlightened the Quebec society. A good friend of mine, whom I wish to mention in passing—his name is Dominic Peltier-Rivest—is a professor of economics at UQAM and he supports my bill, which is comforting to me. I would ask my colleagues to some enthusiasm about this.