House of Commons Hansard #203 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was banks.
Bob Kilger Liberal Stormont—Dundas, ON
Mr. Speaker, pursuant to Standing Order 34, I have the honour to table, in both official languages, the report of the Canadian section of the Parliamentary Assembly of the Francophonie, as well as the related financial report. The report has to do with the meeting held in Saint-Denis, France, from January 19 to 21, 1999.
Guy St-Julien Liberal Abitibi, QC
Mr. Speaker, I have the honour to present, in both official languages, the sixth report of the Standing Committee on Aboriginal Affairs and Northern Development.
Pursuant to its order of reference of Thursday, November 26, 1998, our committee has considered Bill C-56, an act respecting an agreement with the Norway House Cree Nation for the settlement of matters arising from the flooding of land, and respecting the establishment of certain reserves in the province of Manitoba, and has agreed to report it without amendment.
Jim Gouk Reform West Kootenay—Okanagan, BC
Mr. Speaker, I have a petition from a number of constituents who add their signatures to the thousands, if not tens or even hundreds of thousands who have already written in concerned about their lack of access, or their potential lack of access to natural health products. They wish to have that freedom of choice.
They call on the government to not only support the German delegation and the World Health Organization Codex delegation, but any other move by a government that would take away their right of free choice to make decisions on health products for their own health care.
Lorne Nystrom NDP Qu'Appelle, SK
Mr. Speaker, I have the honour to table two petitions in the House today.
One is signed by what appears to be hundreds of people who ask the House of Commons to pass a private member's motion on the Tobin tax. Of course, we did that yesterday in the House of Commons.
The petition deals with the notion that we have a financial transaction tax in concert with the world community because of the tremendous flow of capital around the world, over $1 billion a day. I want to table this petition. Of course, the motion passed yesterday by a vote of 164 to 83, with some members of all parties supporting it.
Lorne Nystrom NDP Qu'Appelle, SK
The other petition is one that will probably surprise you, Mr. Speaker.
I have a petition signed by 104 Canadians calling for the abolition of the Senate. They say the Senate costs $50 million a year, that it is undemocratic, unelected and unaccountable. I can even see the Liberal whip shaking his head in acknowledgement of that. The petitioners say it should be abolished. With great pride I table this petition. Mr. Speaker, I hope you will consider it very sincerely because you have tremendous influence on policy in this country.
Leon Benoit Reform Lakeland, AB
Mr. Speaker, I am happy to present a petition on behalf of people of the Bonnyville-Cold Lake area. These petitioners are concerned with the increase in violent crime in their communities. They are also concerned with the hundreds of millions of dollars that are being spent on the whole gun registry program. They are suggesting that this money instead of being wasted on gun registration and licensing of gun owners should be spent on crime prevention programs. They have listed several crime prevention programs which they feel would be much more beneficial than the gun registry program.
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, pursuant to Standing Order 36, I am pleased to present two petitions today signed by a number of Canadians including from my own riding of Mississauga South.
The first petition is on the subject matter of human rights. The petitioners would like to draw to the attention of the House that human rights abuses continue to be rampant around the world in countries such as Indonesia.
The petitioners also point out that Canada continues to enjoy respect in the international community as being a champion of human rights. Therefore the petitioners call on the Government of Canada to continue to speak out against human rights abuses around the world and to seek to bring to justice those responsible for such abuses.
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, the second petition has to do with our public safety officers, police officers and firefighters.
The petitioners want to draw to the attention of the House that our police officers and firefighters place their lives at risk on a daily basis as they discharge their responsibilities and that when one of them loses their life in the line of duty, the benefits available to the family often are very modest.
Therefore the petitioners would like to call on the government to establish a public safety officers compensation fund for the benefit of families of public safety officers who are killed in the line of duty.
Peter Adams LiberalParliamentary Secretary to Leader of the Government in the House of Commons
Mr. Speaker, if Questions Nos. 120, 143 and 156 could be made orders for return, these returns would be tabled immediately.
Questions Passed As Orders For ReturnsRoutine Proceedings
The Deputy Speaker
Is that agreed?
Questions Passed As Orders For ReturnsRoutine Proceedings
Some hon. members
Agreed. .[Text]
Question No. 120—
Mike Scott Reform Skeena, BC
Can the government provide a list of all band elections held from January 1996 to the present, including in each individual case: ( a ) the name of the band; ( b ) the date the election was held; ( c ) the names of all the candidates; ( d ) the final vote distribution; ( e ) the number of eligible voters; and ( f ) the number of eligible voters who voted (i.e. voter turnout)?
Return tabled.
Question No. 143—
Paul Forseth Reform New Westminster—Coquitlam—Burnaby, BC
With respect to grants or loans awarded by the federal government for building restoration, such as awards made under infrastructure and regional development programs, in each of the last five years, 1994, 1995, 1996, 1997, and 1998: ( a ) how many have been awarded; ( b ) what specifically have they been for; ( c ) what was the geographic location; ( d ) what was the amount of each award, including whether or not it was on a matching basis; and ( e ) under which federal department or program was each award made?
Return tabled.
Question No. 156—
Wendy Lill NDP Dartmouth, NS
With regard to the October 1996 Report of the Task Force on Disability, entitled “Equal Citizenship for Canadians with Disabilities—The Will to Act”, what actions has the government taken to implement recommendations nos. 1 to 9 (including 9 a ), b ) and c )), 10 to 13 (including 13 a ) and b )), 14 to 18 (including 18 a ) through f )), 19, 20 (including 20 a ) and b )), 23 (including 23 a ) through d )), 24, 25 (including 25 a ) and b )), 26, 27 (including 27 a ), b ) and c )), 28 b ), 29 b ), 30 b ), 31 (including 31 a ) through e )), 32 (including 32 a ), b ) and c )), 33 (including 33 a ) through e )), 34, 35 (including 35 a ) and b )), 36 (including 36 a ), b ) and c )), 37 to 43, 44 c ), 45 (including 45 a ) through d )), 46 a ), 47 to 51 (including 51 a ) through f )) and 52 (including 52 a ) through g ))?
Return tabled.
Peter Adams Liberal Peterborough, ON
Mr. Speaker, I ask that the remaining questions be allowed to stand.
Questions Passed As Orders For ReturnsRoutine Proceedings
The Deputy Speaker
Is that agreed?
Peter Adams LiberalParliamentary Secretary to Leader of the Government in the House of Commons
Mr. Speaker, I ask that all Notices of Motions for the Production of Papers be allowed to stand.
Ted White Reform North Vancouver, BC
Mr. Speaker, I rise on a point of order.
On January 28 of this year I submitted a Notice of Motion for the Production of Papers in connection with section 31 of the Elections Act and the Communist Party of Canada.
A week ago in this House I brought this matter to the attention of the parliamentary secretary who said, and I quote from Hansard , “I will certainly look into that matter as soon as possible”.
Could the parliamentary secretary please tell the House what he has found out by looking into the matter? Exactly how long will I have to wait to get the answer to this question?
Peter Adams Liberal Peterborough, ON
Mr. Speaker, I did look into that matter and I assure the member that it it is being pursued vigorously.
With regard to the second part of the member's question, I cannot tell him exactly when we will be presenting that.
I ask that all notices of motion for the production of papers be allowed to stand.
Motions For PapersRoutine Proceedings
The Deputy Speaker
I wish to inform the House that because of the ministerial statement, Government Orders will be extended by 38 minutes.
The House resumed from March 19 consideration of the motion that 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, be read the second time and referred to a committee.
Dick Harris Reform Prince George—Bulkley Valley, BC
Mr. Speaker, I am pleased to rise today to speak on Bill C-67 as the official opposition party's critic for banks and financial institutions.
We have been following the government's lack of progress on bringing in changes to the financial services sector that would put us on a level playing field with other countries around the world, specifically with the OECD countries. Of the OECD countries, only Canada and Mexico do not presently allow foreign branch banking.
For the information of Canadians viewing this debate today, I will give a little description of what this bill is about.
Until now, a foreign bank that wanted to establish an operation in Canada was required to set up an autonomous separate corporation in Canada with its own board of directors, its own accounting firm. It would operate for all intents and purposes a Canadian company with an asset base that was established at the time of its being set up. In many respects this presented a lot of difficulties for foreign banks that wanted to do business in Canada and participate in the economy through lending, deposit taking and various other operations that banks pursue.
As far back as 1996 the then secretary of state for banks and financial institutions, Mr. Peters, told the House that the government was going to make provisions for what we have come to know as foreign branch banking. A change in the Bank Act through legislation would allow foreign banks to simply establish branches here once they have met certain criteria. Their branches would have the benefit of being able to operate in Canada, plus be able to draw on the full asset base of their parent company.
That was 1996. It is now 1999. The question to ask is why it has taken the government so long to bring this plan to fruition. In our opinion, not only has the government been dragging its feet on this issue, but it has been doing some pretty heavy foot dragging on the whole issue of the changes to the financial services industry. This has created a lot of confusion. Quite frankly, it has left the Canadian owned banks that are operating in Canada as well as consumers at somewhat of a disadvantage. The banks' point of view is that they have not been able to pursue opportunities on a global basis to the extent they would like to. Our consumers of bank services have not had the choices they are entitled to and which they deserve.
In November 1998 I produced a report for the Reform Party entitled “Competition: Choices You Can Bank On”. It was quite a lengthy report. We went through most every phase of the financial services sector. We examined it and we put forward recommendations which our party supports.
I am happy to see the Liberal government is following one of our recommendations which deals with foreign bank entry. We said very clearly in the report that the federal government must end its long delay in allowing foreign branch banking. Foreign branch banking legislation must offer foreign banks that wish to have a branch in Canada the same regulatory and taxation regime encountered by domestic banks.
We also said that foreign branch banking must be in place before the government considered the merits of any merger proposal. As we saw last year when four of our major domestic banks put forward their merger proposals, because the government had been dragging its feet on introducing changes that would allow for more competition in the banking industry in Canada, it had no choice. The government dug itself into a hole with its foot dragging and had no choice but to turn the mergers down.
Had we had changes in this country's financial services sector where Canadians had more choices on where they did their banking, perhaps the mergers could have been looked at in an entirely different light, in a more competitive light, in a more competitive environment here in Canada.
There are going to be basically two types of foreign branches in Canada. One will be what they call a full service branch, which will be able to operate primarily in the commercial sector, in the business area. I am sure that will be their target. They will not be permitted to take deposits of less than $150,000, but they will be able to lend money to Canadian companies, to small, medium and large companies that wish to start up or expand their operations in Canada. I am sure that this new access to financing will be of huge value to the Canadian business sector.
The other type of banking they will be able to do is what they refer to as a lending bank, in which there will be no deposit taking. It will simply be a branch of a foreign bank that will be lending money primarily to businesses that want to expand, develop or otherwise increase their services in Canada.
We do not want to mislead Canadian consumers, the retail consumers. It is very clear that foreign branch banking will really not have much of an impact on their lives. They will not see foreign branches established on different street corners in their communities or in their cities.
Foreign branch banking will primarily be setting up in Canada to service the commercial business. There may be a trickle down effect on Canadian consumers, because by providing increased access to financing for business, perhaps there will be some new start-ups of businesses for which individuals may not have been able to get financing from existing domestic banks or other sources. There may be easier financing available for companies that wish to expand in Canada, and this will create more competition in the marketplace. Whenever competition is thriving, consumers always do well. We see it in the big megastores that have been established in Canada, the big box retailers, the grocery stores, the superstores. Consumers are really, in my opinion, getting a huge benefit from having more competition in Canada at stores and in places where they want to spend money.
We will support Bill C-67. Not only do we think it is good legislation. We cannot go without saying that it is about time the Liberal government brought it in. We also question why this government took so long to bring in this legislation, which was promised back in 1996 when the former secretary of state talked about it in this House.
The current secretary of state for banks made some comments in his speech that I think bear response. He said, for example, that a considerable number of foreign banks have cut back on Canadian activities or have pulled out of Canada altogether, that between 1990 and 1998 the number of foreign banks with subsidiaries in Canada dropped from 57 to 45. It is no wonder. The government has been negligent in making changes to the legislation that would allow these foreign branches to come into Canada and service the needs of Canadians who require their services. That legislation simply was not in place.
I did a survey among some 30 very large foreign banks and asked them what changes to the environment in Canada would make this marketplace most attractive to them. The number one answer was to bring in the long overdue legislation that would allow foreign branch banking.
I am happy to see, finally, that the government is doing something that is truly needed in this country. That is a rarity in itself. I can certainly say that.
In our opinion, all the supervisory checks and balances of the regulatory structure are in place to ensure that this is to be a secure system for foreign branch banking in Canada. We are satisfied that Canadians who deal with these new institutions will be able to deal with them in a very confident fashion, considering the criteria that these banks must meet before they are allowed to establish here.
The secretary of state also said “I want to put on the record very clearly that I could not be prouder than to be the secretary of state dealing with Canada's financial institutions”. I am sure he is very proud of that. I suggest that we could all be prouder of him if he would keep encouraging the Minister of Finance to take some of the steps that have to be taken to make Canada a leader in the world banking industry, not just a follower.
For example, we believe that there should be a regular review of the regulations put in place by the Office of the Superintendent of Financial Institutions and the Competition Bureau, the guidelines they operate under and the demands they make on the financial services business, to ensure that the regulations are effective and cost effective. Canada, as we know, can be best described as a very overregulated country to do business in. In so many cases overregulation costs Canadian consumers and businesses a lot of money.
About three years ago a survey was done on all the types of regulations that were in place in Canada. The bottom line of the survey was that overregulation and useless regulations in this country cost Canadians about $5 billion a year. Cost effectiveness in regulations is something that we should look at.
There is another thing the government has been dragging its heels on. We talk about the constitutional division of powers as we deal with the regulations that govern the financial and securities sectors. There is a profound overlapping of federal and provincial regulatory structures, where the regulations are exactly the same but there are two different bodies doing the regulating. This is very costly and very confusing to people who operate under these regulations.
The government can take a giant step by getting rid of the overlap. One regulation covering the same subject, with two different bodies administering it, can be very costly and very annoying to Canadian business. In the banking system, there is overlap and there is regulatory structure that can be made a lot simpler. Maybe it could be overseen by either the province or the federal government. It would be a cost saving step.
One of the things that a lot of politicians will not dare talk about is the subject of taxation and how it applies to banks. I am not afraid to talk about that for two reasons. Canada is an overtaxed country, whether you are a worker or have a business or a large megacompany like a bank.
The New Democratic Party constantly talks about banks not paying their fair share of taxes. Incidentally, for the interest of the New Democratic Party, banks are a business, a business like any other business in Canada, and they are required to pay a fair share of their taxes, but they alone are one of the most overtaxed segments of Canadian business.
For that reason, in the November report that I presented to our party I recommended that a comprehensive review of the taxation regime encountered by Canadian financial institutions be required with the aim of improving competitiveness. The Canadian financial institution taxation regime must be brought in line with the taxation levels of their domestic competitors and other Canadian businesses. That has to be done.
This government also has to take some very serious steps to examine alternative financial institutions, like the proliferation of credit unions. The government could make a lot of changes that would allow credit unions to expand and to serve Canadian consumers' needs. Eliminating provincial trade barriers in that area would be great, as would allowing credit unions to pool their capital so they can take advantage of financing opportunities.
One of the other ways the government can take some steps to improve the industry in Canada is in the area of the clearing and settlement of cheques, better known as the Canada payment system. We need to have the Canada payment system opened up to more players than simply those that we know as banks. Large securities companies do not have access to the payment clearing system and must deal second hand through a bank in clearing their cheques.
I want to talk briefly about improving the role of the national ombudsman, who oversees all banking operations. We believe that when the ombudsman investigates an alleged infraction by a bank, he or she should have increased powers to go in and do a very thorough investigation and, if that institution is found to be in contradiction to the regulations, to actually name names and assess penalties. There is a system like that in the U.K. which we understand works very well. We would like to see that addressed as well.
We are supporting Bill C-67. We think it is long overdue and is needed. The only question we have about the bill is what took them so long. What took this Liberal government so long to bring in this bill that will allow foreign branch banking? It talked about it in 1996. The then secretary of state he said he would do it. It is 1999, almost four years later, and we are finally seeing it. We are happy about that.