House of Commons Hansard #231 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was competition.
Howard Hilstrom Reform Selkirk—Interlake, MB
Madam Speaker, certainly we support the bill. I heard the Parliamentary Secretary to the President of the Treasury Board mention that the bankers of Canada, the Canadian banks, the big five, also agreed that it was good.
Is there a possibility of any connection between the agreement of Canadian banks to this competition coming in and the possibility of the government having agreed in return to support the mergers in the upcoming session in the fall?
Dick Harris Reform Prince George—Bulkley Valley, BC
Madam Speaker, I cannot speak for the finance minister on the question of mergers. We have spoken. In my November 1998 report “Competition: Choice you can bank on” we clearly said that given a far more competitive environment in Canada among the financial industries it would be possible to look at the mergers in a totally new light.
The finance minister would not be well served to make a trade off deal. I am not sure if he did. I do not think so. I think he realizes there is a lot of steps to be taken before he can talk about the merger issue again.
However, as we talk about the banking industry and the possibility of mergers in the House, all over the world major banks are repositioning themselves and restructuring to become bigger and stronger so that they can be leaders in the global marketplace.
We in Canada must recognize it is important to get some changes made to the industry to create a more competitive environment so that our banks will also be able to put forward a reasonable merger proposal. We in parliament can then have a look at it. If it meets all the criteria we expect from our industry then possibly those would be the steps to be taken so that our banks could compete in the global economy. It is important to Canada's economy that we have very strong world banks.
Peter Stoffer NDP Sackville—Eastern Shore, NS
Madam Speaker, I heard my colleague from the beautiful area of Prince George—Bulkley Valley talk about bank mergers. I have a letter from the Canadian Vehicle Manufacturers' Association. It is very concerned about the banks entering into auto lease agreements as are insurance companies about banks entering into the insurance industry.
Would the member not agree that if the banks were allowed to merge and there is less competition in Canada domestically, the foreign operators would not set up bricks and mortar branches? There would eventually be virtual banking. Do he and his party not believe that would have a detrimental effect on other industries in Canada, which means a detrimental effect on workers and their families, as well as on the service charges people are now being forced to pay to banking institutions?
Dick Harris Reform Prince George—Bulkley Valley, BC
Mr. Speaker, I clearly said that the government has to begin very quickly to change the competitive environment of the financial industry in Canada. Then and only then could mergers be considered in a new light and then and only then could they be approved on the particular merits of each merger. I am sure that is what the member heard me say but did not reflect in his question.
With regard to the auto leasing and insurance businesses, we are convinced in our party that the insurance business is well served by the people involved in it. It is a vibrant industry. It is very competitive. We think Canadian people are well served by the current structure of the insurance industry, as well as the auto leasing industry.
If a sector of the industry as large as the banks were to enter into either of those two industries, given their vast databases and the information they have it would have profound effect on both industries. We do not think it would be beneficial.
Therefore our position was stated in my report. I would be glad to send the member a copy of it. It clearly states that is not advisable that banks be permitted to retail insurance products at their branches or enter the auto leasing business.
André Harvey Progressive Conservative Chicoutimi, QC
Madam Speaker, the Reform Party keeps going after the former government, which proved to be effective. I have here a study ranking former Canadian prime ministers based on the following criteria: the fight against inflation and unemployment and the decrease in interest rates and the GNP growth rate. Out of 10 former prime ministers, Mr. Mulroney ranks second.
I would like to know what my Reform colleague thinks of this report that confirms the effective management of the former prime minister. I would point out that the inflation rate stood at 1.5% in 1993, the lowest in 30 years. Interest rates were at their lowest levels in 20 years. The growth rate was higher than the International Monetary Fund had predicted.
I also want to indicate that the deficit is usually expressed in terms of the gross national product. The deficit was 8.7% of the GNP in 1984 and had been brought down to 5.8% of the GNP by 1993.
Figures do not lie. This study ranking all Canadian prime ministers is based on objective and American criteria.
Dick Harris Reform Prince George—Bulkley Valley, BC
Madam Speaker, we have the Tory legacy of $44 billion in their final year in office, and thank goodness it was their final year, $500 billion of debt, and massive mismanagement of our country's finances. End of story.
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
Madam Speaker, I am pleased to speak at third reading of Bill C-67. I only have a few minutes, but it will be enough to present the Bloc Quebecois' views on this bill.
We are concerned about this bill, especially section 7.1 which grants extraordinary powers to the Office of the Superintendent of Financial Institutions. The superintendent has the power, among others, to negotiate with appropriate provincial authorities—which are not defined in the bill—any measure which could result in the superintendent applying federal acts to provincial jurisdiction such as, for example, insurance and securities companies.
However, there is no reciprocity. The bill does not provide that negotiations may take place with the appropriate provincial authorities so that these authorities can apply provincial laws to federally chartered institutions. By contrast, the superintendent of financial institutions will enjoy enhanced powers in Quebec.
The bill could have included reciprocity provisions regarding the enhanced powers of the superintendent of financial institutions, even for federally chartered institutions such as banks or insurance companies, with regard to the implementation of acts in Quebec.
However, there is no mention of such reciprocity. The bill enhances the powers of the superintendent of financial institutions and allows him to get involved in provincial jurisdictions, but the reverse is not true.
Two and a half years ago there was the case of a Quebec insurance company, L'Entraide assurance-vie du Québec, which was and still is governed by a provincial charter. Because of its provincial charter that company was not able to conclude a major transaction to acquire blocks of insurance from a federally chartered insurance company.
Bill C-67 implements some of the recommendations of the MacKay task force, as well as some of the recommendations of the Standing Committee on Finance. We discussed this possibility of allowing provincially regulated companies to buy blocks of insurance from federally regulated companies. We would have thought the Minister of Finance would have taken advantage of this bill to include reciprocity and thus ensure fair treatment for Quebec insurance companies in particular.
Furthermore, we are opposed to this bill because it puts the cart before the horse. For instance, it makes it easier for foreign banks or financial institutions to enter the Canadian market. That is putting the cart before the horse. At the finance committee hearings on the follow-up to be given to the MacKay report, we proposed a three-stage strategy. First, everything possible must be done to strengthen the Canadian financial and banking industry.
No matter what people say, the Canadian financial industry is not the world's most competitive. The day we fully open our borders to international competition, we will see that even the largest Canadian banks are not big enough to stand up to some of the banks now evolving internationally, which have assets 10, 20 and even 30 times greater than those of the largest Canadian bank.
The financial sector has to be strengthened. The ownership rules also have to be changed so that large financial holdings can be created and banks allowed to join forces with a trust company or an insurance company in order to form solid and sizeable financial holdings.
We do not see this in the bill, and that is why we will be voting against it.
Bob Kilger Liberal Stormont—Dundas, ON
Madam Speaker, I think we still have time to vote on this, unless there are questions and comments. I understand there have been discussions among the parties to conclude the debate on Bill C-67 today. I may be mistaken, but perhaps you should ask the question.
Bank ActGovernment Orders
The Acting Speaker (Ms. Thibeault)
Is the House ready for the question?
Bank ActGovernment Orders
The Acting Speaker (Ms. Thibeault)
Is it the pleasure of the House to adopt the motion?
Bank ActGovernment Orders
The Acting Speaker (Ms. Thibeault)
All those in favour will please say yea.
Bank ActGovernment Orders
The Acting Speaker (Ms. Thibeault)
All those opposed will please say nay.
Bank ActGovernment Orders
The Acting Speaker (Ms. Thibeault)
In my opinion the yeas have it.
And more than five members having risen:
Bank ActGovernment Orders
The Acting Speaker (Ms. Thibeault)
Call in the members.
And the bells having rung:
Bank ActGovernment Orders
The Acting Speaker (Ms. Thibeault)
Division on this motion stands deferred until tomorrow following Government Orders.
Bob Kilger Liberal Stormont—Dundas, ON
Madam Speaker, there have been discussions with representatives of all parties and I believe you would find consent for the following:
That the recorded division just deferred on the motion for third reading of Bill C-67 be further deferred until Monday, May 31, 1999, at the expiry of the time provided for Government Orders.
Bank ActGovernment Orders
The Acting Speaker (Ms. Thibeault)
Is there unanimous agreement to proceed in such a fashion?
Bank ActGovernment Orders
The Acting Speaker (Ms. Thibeault)
It being 5.30 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's order paper.
The House proceeded to the consideration of Bill C-235, an act to amend the Competition Act (protection of those who purchase products from vertically integrated suppliers who compete with them at retail), as reported (with amendment) from the committee.