Madam Speaker, it is with pleasure today that I rise to speak to Bill C-276, the legislation that addresses the issue of negative option billing.
It is important when we are developing solutions to complex problems that we do not use solutions which are overly simplistic and may not in fact address the actual complexities of the problem. H. L. Menkin, the American humorist, once said that for every complex problem there is a neat, plausible solution that is wrong.
I have some concerns as a member about the legislation. That being the case, I recognize the position of the hon. member for Sarnia—Lambton in bringing forward the legislation and support the ends he is trying to achieve. I am just questioning whether or not this may be the most effective means to achieve those ends.
Every industry that may use negative option billing is different and operates within different parameters. For instance, cable companies are clearly different from industries within the financial services sector or the banks. In an effort to reduce negative option billing or to address the issue of negative option billing, we have to be careful that we do not create an onerous level of regulation in one industry where it is more prevalent and impose the same level of regulation on another industry that in fact is not utilizing negative option billing as much.
This may lead to greater costs for consumers with a complicated process where effectively participants in that given industry, for instance the financial services sector, may find that it creates a competitiveness disadvantage relative to industries in other areas.
One issue that needs to be addressed is the fact that in mailings from banks or financial institutions to customers there is only a 5% return rate currently. As such, it would create an immense amount of administration within a financial services institution or a bank to actually try to eliminate completely any level of negative option billing.
If negative option billing is being used, for instance to bundle or to package services in ways where a customer may in fact benefit in some way or that would actually reduce the costs to the customer, there is no negative to the customer. That is the case for some of our financial institutions.
It is also important to realize that we heard from the Minister of Finance last June with a response to the MacKay task force of the Government of Canada. Those measures have not yet been implemented. I believe they should have been implemented earlier.
The government is in fact stalling on implementing its response to the report on the financial services sector. The legislative enabling of that response should have taken place by now but it has not. When the Senate looks at the legislation it should ensure that it somehow fits within this private member's bill and that any recommendation would fit within the parameters of the government's white paper response to the MacKay task force.
The issue of the competitiveness of our banks and our financial institutions is paramount right now.
Currently we are seeing around the world immense changes in the financial services sector relative to information technology. Effectively the forces of technology and globalization are transforming the financial services sector.
We have to be very careful in Canada. For instance, this type of legislation does not exist in the U.S. There is nothing like it relative to negative option billing in the U.S. As we increase levels of competition or access to Canadian markets by foreign banks, there is a risk that if we handcuff Canadian financial institutions with this type of legislation we in fact may be imperilling Canadian banks and creating a deleterious impact on them and their shareholders, which in fact include 7.5 million Canadians who actually own bank shares in Canada.
We have to ensure that legislation that is designed on one hand to help Canadian consumers does not on the other hand hurt the 7.5 million Canadians who directly or indirectly depend on their investments in our chartered banks for part of their retirement income or in many cases in most portfolios a significant part of their retirement.
The issue of addressing the differences between industries is paramount. If we create some type of regulatory body or vehicle and focus on protecting people from one industry which affects a broad range of industries, clearly it may have a lot of unforeseen and unintended consequences. We have to be awfully careful of that.
We are supportive of the ends of this legislation, in that negative option billing may be something that is more common in Canada and have a more negative impact on Canada than members of the House are aware. We are studying and discussing as a caucus our position on this matter currently.
When we are crafting public policy in the House we have to be sure that we are crafting it around realities as opposed to perceptions. It is very easy sometimes to develop public policy around perceptions in the current environment of poll driven policy as opposed to policies that reflect the realities of what is going on in Canada.
I would prefer to see a greater level of competition in all these sectors, including the financial services sector. I would like to see the government truly address issues of competitiveness, including greater opportunities for smaller financial institutions to compete fully with the banks in Canada, and thus enable both on the consumer side and on the lending side Canadians to have a greater range of services from a greater variety of financial institutions in Canada.
It is important that we address the basic fundamental issues of competition and do not treat these issues with a less holistic approach. It is important to recognize that effectively we should try to ensure that our regulatory burden in Canada is not grossly different from that which exists in countries with which our Canadian companies need to compete.
Clearly the issue the hon. member from Sarnia raises is a very important one. We have to ensure that the means by which he is proposing we address it are the most appropriate means.