House of Commons Hansard #116 of the 36th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was banks.

Topics

Request For Emergency DebateRoutine Proceedings

3:30 p.m.

The Speaker

Usually when we make interventions they are quite concise. I have read the letters from both members.

I invite the hon. member for Roberval to make his request.

Request For Emergency DebateRoutine Proceedings

3:30 p.m.

Bloc

Michel Gauthier Bloc Roberval, QC

Mr. Speaker, the murder attempt on journalist Michel Auger in Quebec last week was the latest in a series of unfortunate events, to say the least, that have led us to make the following statement: some 150 persons have been assassinated in the course of the biker war in Quebec in recent years.

The attempt on Mr. Auger was the limit and makes it clear just how much organized crime and criminal organizations have become an unacceptable presence in our society—a presence that of itself is unacceptable—but of a significance today that makes all the more unacceptable the action they have taken, what they are doing and what they will do in the years to come.

Last year, my colleague from Saint-Hyacinthe—Bagot was threatened because he reported the cultivation of marijuana on farms in his region. Last week a journalist was attacked because he wrote about organized crime. Sometimes—according to a federal report—judges are threatened. This points to the extreme importance of the matter. There is no place better than the House of Commons to consider this issue.

The criminal code must be amended and put at the disposal of the forces of order and justice whatever means they need to get these criminals, these people belonging to criminal gangs, sentenced. Let us not forget—and it is regrettable to say—that most of the proceedings initiated against these people have met with failure because it was too hard to come up with the evidence. There is vast evidence, and reference to the charter of rights and the use of arguments of all sorts mean that the legal system can no longer produce the evidence.

Accordingly, we sincerely believe that the federal parliament must not only debate this matter. We would have liked to have the House of Commons vote on this so as to be perfectly clear, to have each member asked to rise and say what he or she thinks of this matter: should the federal parliament and the Government of Canada amend the criminal code? That is what we thought, but we would agree to there at least being a debate of this issue, to our sharing viewpoints and to this helping the government decide and respond to this urgent request from the people of Quebec.

Request For Emergency DebateRoutine Proceedings

3:35 p.m.

The Speaker

The issue raised today is a very important one, both for the House and for our country as a whole.

I have listened to the two members who have intervened, the member for Pictou—Antigonish—Guysborough and the member for Roberval. This issue is of such importance that I will allow an emergency debate. It will begin at 8 p.m. this evening and continue until 12 a.m. There will be an emergency debate on the matters which were brought up by the two members who spoke in the House.

Request For Emergency DebateRoutine Proceedings

3:35 p.m.

Glengarry—Prescott—Russell Ontario

Liberal

Don Boudria LiberalLeader of the Government in the House of Commons

Mr. Speaker, now that you have given your ruling in this matter, I wish to move the following motion, and there was consultation, at least with certain party leaders. I tried to meet with most of them during the last few minutes.

I move:

That, notwithstanding any Standing Order, the debate pursuant to Standing Order 52 commence at 6:30 p.m.;

That proceedings pursuant to Standing Order 38 be suspended;

That, during the said debate, no member may speak for more than 20 minutes, followed by a 10-minute question-and-comment period, provided that the Standing Orders respecting the division of speaking times shall apply; and

That, during the said debate, the Chair shall receive no call for quorum, dilatory motion or request for unanimous consent, and that when no member rises to speak, the House shall adjourn until the next sitting day.

The reasons we are moving these slight amendments is so that debate can begin immediately at 6:30 p.m., using the standing order that often applies to evening debates. I think you will find that there is unanimous consent.

Request For Emergency DebateRoutine Proceedings

3:35 p.m.

Reform

Randy White Reform Langley—Abbotsford, BC

Mr. Speaker, I rise on a point of clarification. The Chair allowed debate to take place. I think there was an offer for a motion to be tabled by the member for Pictou—Antigonish—Guysborough.

Is it then the Chair's opinion that this motion, when tabled, would be votable?

Request For Emergency DebateRoutine Proceedings

3:35 p.m.

The Speaker

No, in my view we will have a debate with some modification if it is accepted, but there will be no vote.

I am in receipt of a motion. It basically says that instead of beginning at 8 p.m. we will begin at 6.30 p.m. and all the usual rules for this type of debate will apply.

Does the hon. member have permission to put the motion?

Request For Emergency DebateRoutine Proceedings

3:35 p.m.

Some hon. members

Agreed.

Request For Emergency DebateRoutine Proceedings

3:35 p.m.

The Speaker

Is it the pleasure of the House to adopt the motion?

Request For Emergency DebateRoutine Proceedings

3:35 p.m.

Some hon. members

Agreed.

(Motion agreed to)

Request For Emergency DebateRoutine Proceedings

3:40 p.m.

The Speaker

There will be an emergency debate tonight. It will begin at 6.30 p.m. and will deal with bikers.

Request For Emergency DebateRoutine Proceedings

3:40 p.m.

Liberal

John O'Reilly Liberal Victoria—Haliburton, ON

Mr. Speaker, I rise on a point of order. This day is one of the greatest days in the history of the Conservative Party. I thought that perhaps the party had let it pass by. I did not want it to not be noticed that the Right. Hon. John Diefenbaker was born on September 18, 1895.

Request For Emergency DebateRoutine Proceedings

3:40 p.m.

The Speaker

I am sure that is of interest not only to Conservatives, but to all members of this august House.

The House resumed consideration of the motion that Bill C-38, an act to establish the Financial Consumer Agency of Canada and to amend certain acts in relation to financial institutions, be read the second time and referred to a committee.

Financial Consumer Agency Of Canada ActGovernment Orders

September 18th, 2000 / 3:40 p.m.

Progressive Conservative

Rick Borotsik Progressive Conservative Brandon—Souris, MB

Mr. Speaker, once again, welcome back to the chair. It is nice to have you here after the summer break. It is certainly your privilege and pleasure to be in the chair while I give my dissertation on Bill C-38.

First, I thank the hon. member for bringing to the attention of the House that it is the birthday of the late Right Hon. Mr. John Diefenbaker. It is not just useful information for members of the House, but for Canadians in general. We recognize the importance of Mr. Diefenbaker and the Conservative Party back when Mr. Diefenbaker was the leader, and certainly the history that the Conservative Party brought to this country all the way back to Confederation. I thank the hon. member for drawing that point to the attention of the House and to Canadians.

I have the pleasure of standing before the House today to speak to Bill C-38. I should also indicate that this is a responsibility that was given to me just recently.

Recently, the previous member for Kings—Hants, Mr. Scott Brison, was the one who had carriage of this particular portfolio in this piece of legislation to this point. I can mention his name in the House now as he is not a member. I would like to thank him on behalf of our party for all that he has done for us as well as for Canadians in putting forward what I consider to be the best of the critics' responses to the Minister of Finance. I would almost suggest that the Minister of Finance would agree with me on that comment. Mr. Brison is no longer a sitting member of the House because he gave his seat to an individual who is of the same stature as the Right Hon. John Diefenbaker, the Right Hon. Joe Clark who will be sworn in tomorrow. We thank him for his sacrifices and his diligent work.

It is my duty today to speak to Bill C-38 on behalf of the Progressive Conservative Party. I am sorry I was not able to speak after the member for Regina—Qu'Appelle because it was very important that there be some sort of segue from the NDP ideology and the Progressive Conservative ideology with respect to the banking industry.

I have a lot of respect for the member for Regina—Qu'Appelle, make no mistake about that. He is an individual who has been in the House for a number of years and is certainly very familiar with the issue of finance as he sat on the finance committee for some time. I look forward to working with him as well as with the other members of the finance committee and the Minister of Finance.

The member for Regina—Qu'Appelle certainly espoused his party's ideology with respect to the banking industry and this particular piece of legislation to the point that I almost thought that he would suggest that the nationalization of the banking industry would probably be better for Canadians than having it on an open market basis in the free market system that we now have. That may be a bit insensitive, but I suspect it is probably closer to the truth.

The banks are not the bogeymen in this scenario. The banking industry in Canada is very important not only to us but to our economy. I am sure Canadians recognize that the banking industry itself employs approximately 222,000 Canadians. It is a huge industry that is regulated by legislation. It comes on a regular basis every five years to get legislation changed so that it can operate within those regulations.

The banking industry also has an estimated annual payroll of some $12.6 billion. This is very important for the people who are employed in the industry as well as to governments which obviously tax the people who are employed in that industry.

The banking industry we have today has more than $1.4 trillion in assets. It has over 8,423 branches across the country. It is a huge industry. The banks are not the bogeymen. They are simply an industry trying to do business in Canada.

The banks today generate more than 49% of their earnings outside Canada. Fifty per cent of what the banks earn come from outside the borders of the country. That speaks to the globalization of the financial industry as well as the banking industry.

The really interesting point is that one out of every two working Canadians in some way, shape or form has an interest in a bank. Either directly or indirectly, he is stockholders and shareholders in the industry. Whether it is through a pension plan, through individual stock trades, through mutual funds, or through other types of financial vehicles, one out of every two Canadians has a direct or indirect connection with the stock of a bank.

The legislation which has come forward is very comprehensive. It has 900 pages and takes into consideration 22 separate statutes in the federal government. It deals with approximately 4,000 pages of those 22 statutes with amendments to those pieces of legislation.

I have with me the bill of 900 pages. I anticipate the clause by clause study of the 900 pages of Bill C-38, but in the meantime, I am very pleased to speak to the bill and will try to speak to some of the issues reflected in the bill.

The member for Regina—Qu'Appelle spoke articulately of what was good and what was bad within the bill. I could accept a lot of what he said with respect to good and bad, although I could not accept a lot of the other areas he went to with respect to ownership being raised from 10% to 20%. He was totally opposed to that and I will get into that later. We are not opposed to that at all.

He also said he would not support nor vote for this piece of legislation to go to committee. I find that very strange because there are a number of good issues dealt with in the legislation. We should be supporting it and taking it to the committee level so that we can make the necessary changes, as long as the government and the people on the committee are prepared to listen to good, constructive amendments and changes being proposed. We will get into those certainly at a much later date when we deal with them in committee.

We in the PC Party have been waiting for this piece of legislation for a long time. It is long overdue. We have been waiting for several years to have the legislation on the table. In saying that, I will also state the intention of the Progressive Conservative Party to support the legislation at second reading to get it to the committee stage so we can try to make those necessary changes.

It has taken an awfully long time for the legislation to come forward. It has been almost seven years that the government has been in power. It has been almost seven years since the government has gone through the delaying tactics of task forces, of consultations, of special reports, of any other type of delaying tactic before it could come to the table.

We have heard already that this process started back in 1996 with the MacKay task force. That report was presented to the Minister of Finance on September 14, 1998. It has been over a year since the task force reported to the finance minister and the white paper was dealt with and we are at second reading on September 18, 2000. It has been two years since the MacKay report was presented to the Minister of Finance and we finally have the bill on our desks, a fairly long delay.

In the meantime the Minister of Finance also said to the banks that they would not be allowed to merge. Even though the MacKay report spoke specifically to that issue, I guess the Minister of Finance was caught off guard when some of the banks brought forward their proposals for mergers with other banking corporations.

For over 100 years Canada has enjoyed a competitive advantage over the U.S. in terms of a much more enlightened system of banking regulations. In a previous life when I actually had a real job as opposed to simply standing in the House and speaking to you, Mr. Speaker, and enlightening you and obviously making your day much brighter because of that, I did have the opportunity of working with a corporation that needed the banking institutions that this country has. We were very competitive not only in Canada but also in the United States because we had the ability of dealing with a national bank within this country. We had the ability of generating capital that would not necessarily have been generated within the banking system of the United States.

We in Canada have been very fortunate to have the banking industry we have. For example, in 1987 the Conservative government allowed banks to acquire security firms and five years later, cross ownership was permitted across all four pillars of the financial system: banks, security firms, insurance companies and trust companies.

The opening up of Canada's securities industry in 1987 allowed banks to strengthen the sector thereby maintaining a viable domestic industry. At that point we were the strongest of the banking industries anywhere on the globe. That has changed. We now have some difficulty maintaining the global competition and we will speak to that. In fact this legislation starts to speak to that issue.

Then over the course of the 1990s Canada lost its competitive advantage as U.S. regulators moved to an unrestricted Canadian style system of national banking. As it stands now, the regulatory environment south of the border is far superior to that of Canada's.

Last fall a major new financial bill was passed in the United States which allowed for cross ownership of banks, security firms and insurance companies plus cross selling of services. This means that the bank merger process in the United States does not have to include any public hearings and little political input. In fact a recent wave of mega mergers has reshaped the U.S. banking sector.

Mr. Speaker, we of the elder generation, and I put myself in that category as well, perhaps have not kept up with the changes in the banking system, but banking has changed. Today we do not have to walk into a bank in order to access all of the services we require. We can do all of our banking at a computer terminal. We can do most of our banking by telephone. We can do most of our banking without even having to talk to a banker with respect to loan guarantees, with respect to accessing the loans that are required to maintain business and personal services. That is what we are speaking of and it is not really reflected in this legislation just yet, but we are getting there.

For Canadian banks, any interbank merger is subject to high level political open-ended scrutiny. It would be like trying to get through a minefield with no map. That speaks to the merger requirements that are necessary within the Canadian banking system. This legislation still has put in too many of those minefields to allow Canadian institutions to compete on a global basis with the competition from other countries.

The Canadian financial services sector throughout the past 10 years has undergone more change than in the previous 150 years. At the same time Canadians have advanced legitimate concerns about their banking system, ranging from access to capital for small businesses in rural communities to creating a climate for increased competition in the provision of banking services.

In September 1998 the MacKay task force report provided a comprehensive set of recommendations which successfully balanced consumer interests with the global competitiveness of our financial services sector. In his response the Minister of Finance has focused only on short term consumer interests and has ignored the long term interests of all Canadian consumers. In fact, given the timidity with which the minister has handled his response to the MacKay report, there is no reason that Bill C-38 could not have been introduced in 1994.

In framing public policy, it is very important that it reflects realities as opposed to perceptions. There are many widely held misconceptions about the Canadian banking industry. The reality is that Canadian banks are delivering good value to Canadians.

We enjoy one of the most stable and efficient banking systems in the world. Canadian banks are widely owned by Canadians. Some 7.5 million Canadians have invested in banks. These 7.5 million working Canadians are relying on their bank shares to provide for retirement savings, or for that matter, investment income.

Furthermore the financial services sector employs over half a million Canadians. Its payroll, as I mentioned earlier, is $22 billion. It represents 5% of the total GDP.

Components of this important piece of legislation include allowing single shareholders to own 20% of voting shares of the big five banks, up from the current level of 10%. These banks, however, have to keep Canadian headquarters and their boards have to be three-quarters Canadian. That is a good component of this legislation, an increase from 10% to 20% ownership.

It allows banks to set up a holding structure which could then have separately regulated subsidiaries, including retail banks, credit card companies and insurance firms. That is a wise move on the part of this legislation.

Banks with between $1 billion and $5 billion in assets would be allowed to have controlling shareholders with stakes of up to 65%. The current rule is a single shareholder can own no more than 10%. Banks that fall into this category include the Laurentian Bank, the National Bank and Canadian Western Bank. Ministerial approval would still be needed to approve any takeover, which would effectively shield these banks from hostile takeovers.

We heard earlier about some concerns with respect to the power of the ministerial rights and we agree with that. We believe that the minister has substantive powers built into this legislation. It is one of the areas we would like to see changed quite dramatically going into the committee and going into the hearings. We would like to hear from the stakeholders as to how they feel that after all the processes have been followed it will be the minister who will make the final decision. It was said earlier that it should be parliament that has the say in those decisions, not just the minister.

There will be a new federal ombudsman established to handle complaints who will be independent of the existing banks. His or her ruling would not be binding on the banks, but the ombudsman would have the authority to make the complaints public. That is very positive.

There will be a new consumer finance agency. The agency will be established to strengthen the overseeing of banks. This new agency would be an advocate for consumer issues in the financial services industry.

All consumers will have the right to basic banking accounts and standard services at a low cost. This is in response to past complaints that the poor have had difficulty in gaining bank accounts. This is a positive change and one which the PC Party wholly supports. It was also one of the changes which the hon. member for Regina—Qu'Appelle indicated was a very positive step forward in this legislation. That is why I find it very difficult that the member would not see fit to support this legislation to go forward to committee so that this one area of the legislation could continue forward and be a very important part of the new regulatory system for the banking industry.

This legislation, however, fails to put into place a less arbitrary and political process for bank mergers. We have already heard from the Liberal government experts and the people who sit on the committee, those beacons of knowledge across the floor who have uttered such phrases as “I don't imagine we are going to look at a bank merger proposal anytime soon”. I find it difficult to recognize that these people, who are the experts in the financial industry, are now suggesting that bank mergers are not a part of the future. Mergers are a part of the future, have been a part of the future and are certainly going on as we speak today internationally as well as in the United States.

In addition to putting mergers on hold indefinitely and loosening share ownership restrictions, which could result in foreign control of the Canadian banking sectors, Bill C-38 does not adequately address the competition issue. If the government was serious about increasing competition it would have adopted the MacKay recommendations that the interact network become fully accessible and fully functional. Full functionality of the interact network would effectively provide any new bank with 14,000 access locations.

According to the government the aim of the bill is to allow banks to evolve to meet competition and at the same time protect consumers. I would argue, however, that due to the government's slow reaction to the changes in the financial services sector Canada has already fallen far behind. The one thing that is clear is that after years of uncertainty from the current government it has finally added some clarification and stability to the banking industry.

The PC Party of Canada will be supporting this bill. We feel that this is the first tiny step in the right direction.

Financial Consumer Agency Of Canada ActGovernment Orders

4 p.m.

Bloc

Jocelyne Girard-Bujold Bloc Jonquière, QC

Mr. Speaker, I am pleased to rise today to speak to Bill C-38, the Financial Consumer Agency of Canada Act.

We are now at an extremely important stage in terms of the future of the Canadian banking system. On June 13, the finance minister entered the final stage of his reflection on this problem by introducing Bill C-38. I want to indicate at the outset that, like my colleagues in the Bloc Quebecois, I will oppose this bill. I will take this opportunity to thank and to congratulate my colleague, the member for Saint-Hyacinthe—Bagot, who was very effective in leading the debate on this issue.

The Bloc Quebecois will be proposing amendments to the bill at report stage in order to correct the inequity that exists in this bill with regard to large Quebec banks.

Why should we oppose this bill? Several aspects of the bill concern me, particularly the fact that, under this bill, the Minister of Finance will have the power to decide the future of Quebec banks. I find it unacceptable that this discretionary power is as strong as if not stronger than the act itself.

The Bloc Quebecois is concerned about the fact that a single shareholder could, with the approval of the Minister of Finance—and this is very serious—with the approval of one man, hold a 65% interest in the National Bank, the largest Quebec-based bank. There is no need for the Minister of Finance to allow this kind of excessive control to give the National Bank the flexibility it needs to continue to prosper.

How can a shareholder holding 65% of the shares of a bank give more flexibility than 65 shareholders holding 1% each? The answer is obvious. The risk could be enormous if this bill were to be adopted.

Members will no doubt remember the whole matter of the restructuring of the airline industry that received a lot of coverage last summer. Under the former act, which was amended by Bill C-26, a shareholder could not hold more than 10% of the shares of an airline company, and that is an important element to prevent excessive control by a single shareholder.

The Bloc Quebecois fought a good fight on that front, and at the end of an opposition day on the issue, three Liberal MPs supported our position. I hope that some of them will have enough courage and democratic conviction to oppose the provisions of Bill C-38.

One has to realize that there is no need, and I repeat no need, for the Minister of Finance to authorize this excessive control to ensure the flexibility of the National Bank. Let us be serious for a moment. We are not talking about 10%, as in the case of Canadian Airlines International, but about 65%. The legislation should be there to ensure that the banks cannot be controlled by a single shareholder, as could be the case under Bill C-38. This is a very serious matter.

We need legislative guarantees against any negative impact these new ownership rules might have on employment of professionals, consumer services and small businesses. More important is the fact that these negative impacts will hit Quebec the hardest. I wonder if this bill was not introduced to pick on Quebec.

Let me repeat this for a third time. We have to remember that the provisions allowing single shareholders to have 65% of the shares will mainly affect the National Bank, which is the largest bank in Quebec. The stakes are just too high to rely on only one man, the Minister of Finance, especially since there are no legislative guarantees in the bill. Bill C-38 does nothing more than list some elements to consider that are under the sole control of the minister.

I wonder what legislative power is all about if everything is under the minister's control. Can anyone tell me? If some workers lose their jobs, who will they turn to, given the harsh constraints of the employment insurance system? Only 40% of these workers will be eligible for EI benefits. And let us not forget that almost 100% of all bank employees are female. Under this legislation, it is once again women who stand to lose their jobs at a time when 77% of them are not eligible for EI benefits. It is bad, it is cruel, and it is tragic.

This is another reason why this bill should be revised.

What will happen to the others? I doubt the finance minister will show much compassion, given his neoLiberal policies.

Worse, Bill C-38 is full of phrases like “The minister may deem necessary” or “such and such a section of the act will cease to apply if the minister so decides”. Everything seems to depend on the minister's decisions. How could we trust the minister's decision, when he still has not decided or seen fit to tell whether or not he will be running in the next election, whether he will become the Prime Minister some day, or whether he will pay his taxes in Canada, like everybody else does?

With all those ifs, and a minister who keeps shifting positions, I really have to wonder.

Under this bill, which reminds me of Bill C-33, there will be no duplication with the provinces, “if the minister deems necessary”. How could I trust such empty promises?

We should not be fooled by the advantages of Bill C-38. In Quebec, small businesses will be affected the most by this bill. It is not obvious that the finance minister's bill will bring about more healthy competition on the national market. But competition is more important for our future economic development than the creation of big banks to compete on the world market. Nonetheless, the Minister of Finance has decided to make a law for big banks, even if that means sacrificing Quebec banks like the National Bank, which is the institution for small businesses in Quebec.

What is more, the term Liberal government bill is nearly always synonymous with interference in areas of provincial jurisdiction. We are used to that, because that approach has become this government's stock in trade. The finance minister's bill established the financial consumer agency, which is intended to protect the consumer. It is no secret that the Bloc Quebecois is a staunch defender of consumer rights.

I would remind hon. members that there are laws for that purpose already in place in Quebec. There is, for instance, the Consumer Protection Bureau Act, as well as the Consumer Protection Act, the Act Respecting the Protection of Personal Information, the legislation on insurance, trust companies, savings, credit and securities unions and so forth.

Hon. members can see just how well protected the consumer is in Quebec. Why then, once again, does this government want to trample over provincial areas of jurisdiction? The provinces have, like Quebec, done their duty.

The creation of the agency as set out in Bill C-38 is therefore liable to create still more regulatory overlap with measures already put in place by Quebec, and naturally so, since this is a provincial power.

I will never tire of repeating that this government needs to listen to reason. If it wants to pass legislation, it ought to do so in its own areas of jurisdiction and leave areas of provincial jurisdiction alone.

I cannot help but be incensed with the Liberals' duplicity in this matter, because after the 1995 referendum they passed a totally senseless motion recognizing Quebec as a distinct society.

The problem is that Liberals ought to take this motion into account and curb their uncontrolled urges to encroach upon Quebec's areas of jurisdiction, if they were consistent. Now there is another risk of duplication, such as in the case of Bill C-33 about wildlife species at risk which I mentioned previously in my speech.

Before concluding, I would like to refer to another provision in this bill, about the low-fee retail deposit account which, according to the finance minister, should make financial services accessible for low income people.

What a nice vague provision. Nobody knows what that account really is, except perhaps for the minister. Nobody but the finance minister knows who will be able to take advantage of that account. Why? Because the minister will determine these matters by regulation. An order in council, what a nice form of democracy enhancing the value of the role of parliamentarians.

Pardon my irony, but I have a hard time believing the nice words of the finance minister, and these nice words hold no comfort for me at all with regard to enhanced consumer protection, especially with regard to branch closures and service reduction in bank branches.

What is Bill C-38? An advance notice, nothing more. How can the minister say that financial services will be more accessible? I would also have liked to talk about the community role of the banks, about community reinvestment at the local level, where they have to be accountable to the population. My colleague from Hochelaga—Maisonneuve has been lobbying for a community reinvestment scheme since 1995.

The bill may have positive aspects, but it also has black holes, like the springtime black hole that the Minister of Human Resources Development intends to maintain with the changes she has made to EI. Seasonal workers will now have more and more difficulty getting benefits.

I ask the government to listen to ordinary citizens. I think that the Liberal members drifted away from ordinary citizens and I ask them to come back to reality and to meet the real expectations of people, taxpayers and ordinary citizens. Bill C-38 is a vague legislative measure which is more wishful thinking than real political action.

Financial Consumer Agency Of Canada ActGovernment Orders

4:15 p.m.

Bloc

Réal Ménard Bloc Hochelaga—Maisonneuve, QC

Mr. Speaker, I would like to begin by saying that it is good to have you in the Chair to continue where we left off. Before putting a question to my delightful and charming colleague from Jonquière, I also want to welcome the pages, who come from all over, and tell them that they are assured of the co-operation of the Bloc Quebecois.

My colleague, as always, has made an eloquent speech, because her roots run deep in the community of Jonquière. With considerable interest, I would say, she got the members of this House to understand that Bill C-38 should, to all intents and purposes, be withdrawn. It is too unfair that the people involved in the MacKay working group were mobilized. This group made very specific proposals for consumers.

Do they really think the MacKay task force got a positive response from the government side? Absolutely not. Could my colleague tell us just how justified we are in feeling disappointed on this side of the House and how all those who believe in the higher interest of consumers are justified in feeling disappointed because there are no specific measures for consumers?

I know that my colleague is someone who is very much in touch with the Mouvement Desjardins in her region, who attends cocktail parties there and other similar events and who, I believe, has long supported the values of the co-operative movement.

My colleague truly believes that it is important, in a region, to have the Mouvement Desjardins. What is the basic rule of the Mouvement Desjardins? One vote per person and everyone has equal status as a member. Is this logic not interesting?

Earlier, we referred to the specificity of Quebec's financial system. What is the first distinctive feature of that specificity? It is indeed the Mouvement Desjardins. My colleague, the hon. member for Chambly, will correct me if I am wrong, but I believe the Mouvement Desjardins is celebrating its 100th anniversary this year. I am sure that between now and the month of December we will have the opportunity to remind everyone that it all began very modestly in the basement of a church. There was this notion that it was important to save money. Why? Not to squirrel money away, not to become rich, but to truly control our destiny and have greater control over our economy.

Does my colleague not believe that the Minister of Finance could have taken a cue from modern Quebec's views in this regard and shown greater co-operative or community vision in this bill? Does the hon. member share my outrage at the fact that the minister is, to all intents and purposes, a heartless individual who did not listen to the MacKay commission, and does she agree that there is nothing concrete for consumers, who have an urgent need for additional protection?

I will conclude here because my time is running out, but in a few moments I will have the opportunity to talk about what is going on in the riding of Hochelaga—Maisonneuve, about pawnbrokers, shylocks and other bad things that happen in a community when we do not assume our responsibilities regarding financial institutions. I would appreciate hearing my colleague's point of view on this.

Financial Consumer Agency Of Canada ActGovernment Orders

4:20 p.m.

Bloc

Jocelyne Girard-Bujold Bloc Jonquière, QC

Mr. Speaker, I would like to thank my colleague for Hochelaga—Maisonneuve. I could not have said it any better.

It is true that the Mouvement Desjardins is celebrating its 100th anniversary this year. I want to take this opportunity to congratulate it and to thank it for its involvement and for the help it has provided ordinary people over the years.

I think this Liberal finance minister is hurting ordinary people with this bill. I will listen carefully to the speech by my colleague from Hochelaga—Maisonneuve. In a few minutes, he will tell us that the government has not paid any attention to the impact that regulations and legislation on the restructuring of the banking system will have on ordinary people.

As my colleague was saying, this government is heartless, and we can see that every day. We have just come back to the House today and the government is already showing that it is heartless. We have asked for an emergency debate on the issue of organized crime. We were told that closure would be invoked with regard to Bill C-3, which deals with young offenders—

Financial Consumer Agency Of Canada ActGovernment Orders

4:20 p.m.

An hon. member

There is an election in the offing.

Financial Consumer Agency Of Canada ActGovernment Orders

4:20 p.m.

Bloc

Jocelyne Girard-Bujold Bloc Jonquière, QC

Enough is enough. Quebecers are sick and tired of this heartless government.

I will listen carefully to the speech by my colleague from Hochelaga—Maisonneuve.

Financial Consumer Agency Of Canada ActGovernment Orders

4:20 p.m.

Liberal

Peter Adams Liberal Peterborough, ON

Mr. Speaker, I have a question for the member opposite. On what date exactly is the anniversary of the Mouvement Desjardins?

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4:20 p.m.

Bloc

Jocelyne Girard-Bujold Bloc Jonquière, QC

Mr. Speaker, it was in March 2000. We celebrated the 100th anniversary of the Mouvement Desjardins in March 2000.

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4:20 p.m.

NDP

Libby Davies NDP Vancouver East, BC

Mr. Speaker, like my colleague, it is a pleasure to see you back in the House. I also want to give a warm welcome to the pages who are beginning their work here. I sure hope we do not drive them crazy before the end of the session.

I will be sharing my time with the member for Sydney—Victoria.

I am very pleased to participate in the debate today.

Earlier today our finance critic very eloquently outlined the NDP's work and position on this massive bill before us. Our finance critic has certainly done an incredible job over the years of bringing forward in the House how unaccountable and undemocratic the banking sector is and the concerns of consumers and Canadians. I applaud him for his very thoughtful analysis and comments earlier today.

Yesterday in Ottawa I was sitting at a kitchen table talking about political life with a young working couple with a newborn baby. The new mother said “Let us talk about our banking horror stories”. For two hours this young family and their friends swapped horror stories about their encounters when dealing with a big bank.

I cannot think of any issue that would unite Canadians, whether nationalists in Quebec, people in Vancouver, people in the maritimes or wherever, in terms of the suspicion and contempt that people have and, dare I say, even a sense of outrage at what happens in the banking sector. We can all think of our own personal experiences of what it is like to deal with these massive institutions that bleed the Canadian public.

A young student I talked to a few weeks ago was outraged when she went to her bank, the Royal Bank, and found out that there was now a $1.50 service charge for using the Royal Bank ATM machine. We all know that if we go to another bank we have to pay a fee but now even the bank we deal with is charging a fee. This is a young student with a huge debt who is getting dinged again. The stories go on and on.

This piece of legislation, the 900 or so pages, is a very important piece of legislation but it demands that we, as members of parliament, examine whether the bill sets out what it claims to do, which is to reform the financial sector and truly protect Canadians from some of the appalling practices and gouging that takes place.

One of the biggest complaints I hear from the constituents in my riding of Vancouver East, which probably has the highest incidence of poverty and more low income families in the country in an urban setting, is that people who are poor cannot access financial institutions. The discrimination that exists is awful. It is hard to believe that it could exist in today's society. It is so subtle and people are treated with such disrespect and contempt that it makes people on welfare or social assistance feel like nothing. They feel devalued as human beings.

As a new member of parliament, over the last couple of years I introduced motions in the House of Commons to deal with this issue and to draw attention to the discrimination that poor people and low income Canadians are faced with in the financial sector and which absolutely has to change. The bill takes some steps to do that but there is no guarantee that it will actually happen. No basic package has been set out to ensure there will be a no frills bank account. A lot of research has been done which shows that this is entirely possible and administratively easy for the banks to do.

For example, one of my motions called on the government to work with community groups to not just change the legislation but to change the culture and attitudes of the big banks toward poor people and to make it unlawful for someone to be denied access to banking services as a result of his or her income.

Anyone who does not believe this is happening should go into any of the big banks on an assistance cheque day to see the kind of mayhem that takes place and the kind of anxiety and anguish that people go through trying to get their cheques cashed. People end up going into the marketplace, into the money marts and so on, and paying huge amounts of money from their meagre low incomes to get cheques cashed that may be from a provincial government or the Government of Canada. It could be pensioners with pension cheques and so on. It is a very fundamental issue of equality and ending discrimination in Canada.

The situation became so alarming in Vancouver East that our provincial government, in co-operation with the local community, established a very successful community savings financial institution called the Four Corners Community Savings at Main and Hastings. In actual fact it is situated in an old Bank of Montreal building that was closed down like many other branches that moved out and closed down. We now have a very successful community model of accessibility and non-discrimination. Poor people can now say they have a few bucks they want to put in the bank without being penalized and looked down on. They do not want to go into special line-ups. The big banks force them to go into special line-ups because they are poor. I am disappointed because the bill does not adequately address this fundamental concern.

We in the NDP have some other concerns with the bill. One of them is the fact that it does not deal with the issue of corporate concentration. We have six major banks with assets and profits worth multibillion dollars, and the bill would encourage and allow greater corporate concentration and ownership by changing the rule from 10% to 20% in terms of the number of voting shares that one can own and from 10% to 30% for the number of non-voting shares. That seems to me to be a non-reform item. This is not about reform. This is about giving the banks a massive hand up, something that they do not need, and allowing for corporate concentration.

It is positive after many years of work that credit unions will be recognized by being allowed to have a single service entity to support credit union membership. We have in Vancouver a highly successful model, probably the most successful and largest credit union in Canada Van City, which is providing a real alternative to big banks for these people. To give credit to the government, there is that positive aspect of the legislation.

Another issue that is quite amazing is that the bill is silent on taxation. The combined after tax profits of the six big banks amount to $9.1 billion. What does the Government of Canada do? What does the finance minister do? Does he deal with that issue? Does he bring fairness and equity to the taxation system to give modest income Canadians and low income Canadians a break? No, the opposite is true. We actually see a corporate tax cut by the finance minister from 28% to 21%. This means that these banks are getting more powerful. They are getting more influence. They are getting more money. This is completely contrary to democratic reform.

It poses a question. Who will stand up to these banks? I do not think it will be the Liberal government. It is quite cozy in its relationship with the banks. It sure as heck is not the Canadian Alliance. We have to shake our heads and wonder what the heck is going on.

The Globe and Mail today quotes that wallets are being opened at events that include a $25,000 table dinner with Mr. Day in Toronto, expected to draw 2,000 executives. It indicates that executives are genuinely attracted to the Alliance's position on flattened taxes, deregulation and a diminished role for the federal government within Confederation. Here we see the hand in glove, the nice cozy alliance between these fancy executives and this political party which purports to speak up for the little guy. There we see it. The evidence is there in terms of where they do their fundraising and who they seek to attract.

The question of who stands up for the banks is something that should be addressed by parliament. In our party we have taken on this issue. We have consistently called for democratic reform. We have consistently called for an ombudsperson who has real clout and teeth and is not just a paper entity.

One of the real concerns with the bill is that more power is given to the Minister of Finance, not parliament. Power is being taken away from parliament.

At this point we are clearly not in support of the bill unless there are major changes. What we need to do in debating this legislation is truly examine whether or not it is protecting the consumer.

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4:35 p.m.

Bloc

Réal Ménard Bloc Hochelaga—Maisonneuve, QC

Mr. Speaker, I thank my colleagues for their kind solidarity, which makes itself known every time we are called on to evolve together, whether in caucus, general council or here in parliament. We form a solid and unshakeable block.

That having been said, I also wish to thank my colleague for her speech. We are familiar with the social concerns she has defended since first entering parliament in 1997.

I wonder whether I could count on her lively, committed and outspoken support for an upcoming amendment. I think that I can speak on behalf of the member for Saint-Hyacinthe—Bagot, who is also very strong on social commitment. We have been fighting since 1996 to have banks reinvest in the community.

I have to say that in 1996 I went to the United States to meet Joe Kennedy Jr., who was behind the second generation of community reinvestment by the banks because, incredible though it may seem, in 1977 the United States passed legislation known as the community reinvestment act, which I will speak about shortly.

The United States cannot be called a country where freedom of entreprise is in any danger. It cannot be said that the American banking system is not subject to cutthroat competition because, unlike the Canadian banking system, the American one is much more fragmented. There are regional and even local banks.

So I ask my colleague whether she thinks that the superintendent of financial institutions should assess the effort made by the banks to meet the credit needs of all consumers, including those in less well off communities?

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4:35 p.m.

NDP

Libby Davies NDP Vancouver East, BC

Mr. Speaker, I could not have come up with a better question myself. I thank the hon. member for the excellent question because I actually did not have time to cover that point.

I want to say most strongly and categorically that our party absolutely and very clearly supports the community reinvestment act. What they have been able to accomplish in the United States is a clear demonstration that when we lay down clear legislation and make it clear which side we are on, that is to protect Canadians and consumers, we can force these banks to be socially responsible through legislation. It can work.

I know communities where local businesses cannot get a bank loan because they are considered to be in a blighted or devastated area. That is the situation in my own community. There are whole blocks which are boarded up and empty, partly because they cannot get access to financial institutions. This is what happened in Chicago and in other cities.

A community reinvestment act which says that some of these massive profits have to go back to the community good, to community benefit, is a sound, democratic and rational principle that is not in this bill.

I am glad to hear that my colleagues from the Bloc Quebecois are speaking out on this matter too. We should be pressing the government and asking why there is no community reinvestment legislation contained within this 900 pages, why it is so glaringly absent, and why the Liberals are again bailing out these banks.

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4:40 p.m.

NDP

Peter Stoffer NDP Sackville—Eastern Shore, NS

Mr. Speaker, I draw the attention of the House to the member of the Alliance Party, the hon. member for Souris—Moose Mountain, who on August 18 with his wife celebrated their 50th wedding anniversary. I congratulate him on behalf of all of us in the House of Commons.

I have a question for my hon. colleague from Vancouver East. Years ago the Government of Canada made a fishing czar out of the DFO minister by allowing him more unprecedented powers ever than any other minister in the House. Now it appears that this legislation will make a banking czar out of the Minister of Finance. I would like comments from my colleague for Vancouver East on what she thinks of the new banking czar this bill may create if it is passed.