Mr. Speaker, I want to acknowledge my Reform friend for co-operating earlier. I appreciate it very much.
Bill C-67, an act to amend the Bank Act, the Winding-up and Restructuring Act and other acts relating to financial institutions and to make consequential amendments to other acts, is opening the door to foreign banks coming into Canada. Let us make that clear.
We have heard about some of the concerns raised by others, some of the benefits and so on. I will venture out and do something that I think is unusual for a politician and attempt to predict the future. I have no corner on wizardry or looking into a crystal ball, but it does not take much crystal ball gazing to figure out what is going on.
The other day I said that sometimes when I stand in the House to make a speech I feel a bit like a eunuch. I do not mean that in any kind of personal sense. I mean it in a helpless sense, in kind of a worthless sense. What is the point? It is sort of the opposite of the Viagra issue. Why are we doing this? Sometimes I feel like I am a great big thick rubber stamp with ink all over one side of me, and every now and then I am asked to rubber stamp something that is going on.
I have a choice. I am either a eunuch or a rubber stamp. I will probably go with the rubber stamp classification. Why do I feel this way? Those in the gallery, those watching television, those listening in and those who will read Hansard or perhaps watch the CPAC version later today will be under the impression that we are debating whether or not to proceed with allowing foreign banks into the country. There will be some good ideas, some bad ideas, concerns and so on, but there will be an impression that we are actually debating this issue and that the debate has some consequence.
It does not. It has no consequence at all. Just as sure as the sun came up this morning, the legislation will pass expeditiously. It is not because most parties will support it. It will pass expeditiously because the government has committed to the World Trade Organization to pass the legislation by end of June.
What does all this mean? Let us look at the details. First we got a clue, not from the Canadian government, not from any government press release, but from the Wall Street Journal . Those of us who read the Wall Street Journal on November 10, 1997, would have noticed the article “Financial services talks heat up”. That article stated that Canada would submit a revised offer committing itself to open branch banking to other WTO members. In other words, Canada made a commitment on November 10, 1997 to open up its doors to foreign banks. We did not learn about that in Canada. We had to read it in the Wall Street Journal .
On December 12 a government press release came out stating that Canada welcomed WTO financial services agreement. Services such as banks and insurance companies of a foreign nature would have access to Canada. That was the formal announcement.
Just a few days later guess what other announcement was made? It was the announcement that the Royal Bank and the Bank of Montreal were to merge. They had read the newspapers as well. They were aware that the Canadian government had negotiated a deal with the World Trade Organization to allow foreign banks to come into Canada. The Royal Bank and the Bank of Montreal said they had to do something about it. They had to get a little tougher and bigger and merge in order to confront the foreign banks being allowed into Canada and made that announcement. This apparently shocked the Minister of Finance.
Knowing the discussions that take place around these issues, I suspect the banks were aware of the discussions in the World Trade Organization regarding financial institutions. I am sure the Department of Finance would have been in touch with the major banks of Canada to alert them to this fact.
What did the Minister of Finance expect, that the Canadian banks would just sit there and say that any foreign bank could come into the country and be able to operate? They had to take some steps to protect themselves, and merging was one of the options.
I will make a prediction today. Soon, because of the foreign banks that will be coming into Canada, in particular at the commercial level, and because of the increased competition from these great big foreign banks we will have to revisit the idea of bank mergers. In order to compete the Canadian banking industry will have to take on the international banking giants. They are too small to do it on their own so they will have to merge in some form. Will the Minister of Finance be open to some aspect of merging?
We now understand the changing world conditions and the changing conditions of international banking. We have huge American, European and Japanese banks now operating in Canada at the commercial level. We have to protect our Canadian banks and allow them to grow. Then the debate will be over and mergers will be announced in due course.
That is my prediction. I hope I am wrong in my prediction but that is the way I suggest things are likely to evolve.
What does the legislation do? I listened to my friend, the secretary of state for financial services. He is a man of great integrity. He is a man whose words I listen to carefully and whom I often support. I am encouraged by his openness. We will notice in today's issue of Hansard that on the issue of whether foreign banks coming into Canada will help the small business community he said hopefully. That was his word. He was hopeful the foreign banks would be providing services to Canadian small business that are in search of capital.
I give the minister credit because he certainly did not say that this would be good news for small business. He said that he was hopeful. I give him credit for being hopeful at least. Surely we ought to do something more than simply being hopeful that small business will have better access to capital. I will set that aside for now.
Anybody who believes for a moment that Bill C-67 will result in foreign banks coming in and providing much needed competition for the citizens of Canada is dreaming in Technicolor. That will not happen.
It is clear. They are here. They are interested in commercial banking. Their primary interest is not in retail banking. They tried that. We had all kinds of foreign banks coming to Canada in an effort to provide retail competition. Most of them have left or have identified a small niche market which they are in at the moment.
By and large, expansion in the retail banking sector by a foreign bank will simply not happen. The big Canadian banks have that market pretty well sewed up. There will be a creaming off of the system. We will have increased numbers of foreign banks competing with our national banks to get the best business.
One thing about big business is that it does not now rely on Canada's banks. Big business has access to capital on a global scale. It can access capital in Europe. It can access capital in the United States. It can access capital in Asia.
This is not necessarily a problem. Basically we will have some big banking giants competing with our banking giants for the very lucrative top end commercial market. That is fair enough. That is what will happen. That is what the banks say they are interested in. They are not interested in providing more competition at the retail level.
In other words, they are not interested in providing competition that will benefit the people of Canada in any meaningful way. They will not open branches in small communities. They will not open branches in rural communities. They will not provide better services in small towns of Canada or in the suburbs of our cities.
They will be on the main street. They will be on the Bay Streets of Canada competing for the international global capital market. That is where they will be. Let us understand the average Canadian citizen will not benefit by the existence of foreign banks in this country.
For those people who are operating small businesses in Canada, for those people who are probably operating medium size businesses, for those people who are self-employed, running home based businesses or small operations, foreign banks will be of little if any help at all. That is not the market foreign banks are looking for.
In terms of the problems of accessing capital, the problems of establishing good operating lines of credit, and the problems of accessing money for small entrepreneurs, for small business operators and for self-employed individuals will not be assisted in any meaningful way by allowing large foreign banks to open operations in Canada.
The legislation says that to open an account the minimum deposit is $150,000. How many people have $150,000 to deposit into a bank just like that? We are talking about a certain amount of people, not average individuals interested in the banking services of Canada.
When I listen to some of my friends saying this will create competition for Canadian banks in terms of getting them to lower their service charges and so on, it is just by and large dreaming in Technicolor. That will not happen.