Mr. Speaker, I am pleased to rise today to speak to Bill C-38, which deals with the reform of the financial system.
For the benefit of our listeners, that means the reform of the whole banking network and the whole system of financial institutions in Canada. A review of the act takes place every 10 years or so. I have been a member of parliament for seven years, and the act is now being reviewed. This is probably the only time it will be while I am a member of parliament.
This legislation is very important as it governs every financial transaction, not only our small deposits at the bank, but also any transfer of funds across Canada.
Moreover this is happening at a time when globalization is changing all the mechanisms that govern how trade is conducted between various countries around the world, which will have an impact on the way financial services are structured.
Therefore, we must take a serious look at the whole thing and see if indeed the reorganization under way is interesting, satisfactory and good for the future of the financial system in Canada and more specifically in Quebec.
When reading Bill C-38 one notices that it gives the Minister of Finance total control over the future of Quebec banks. Moreover, it does not give any guarantee the minister will take into consideration the specific nature of Quebec's financial system.
A case in point, to which we will get back later on, is the way the bill deals with the possible acquisition of the National Bank of Canada, the type of ownership that might apply to this bank compared to other major banks in the rest of Canada.
It is the kind of double standard we in the Bloc Quebecois find totally unacceptable. It is also unacceptable to the Quebec government. The minister of finance of Quebec said so in a letter to the Minister of Finance of Canada, dated June 7, 2000, clearly stating that there are four main criteria to determine what constitutes public interest, and these are not included in the legislation. As far as I am concerned they should be.
The first criterion is the effect of change on present activities in these banks, including the services available. It must therefore be ensured that this bill has a proper administrative framework and is not merely dependent on the good will of the Minister of Finance.
The second effect is the effect the change will have on employment, both at head office and in the branches, including professional positions and those requiring specialized expertise. In other words, we do not want to see a change that would make banks into empty shells, which would for instance make the National Bank a kind of foreign entity in Quebec. At the end of the day, this would mean we would not longer have any control over the bank itself. There would just be an empty shell, and all the specialized jobs, all the jobs with particular, strategic importance, might disappear, particularly from head office, and end up elsewhere. Thus we would lose the control developed over the years.
The minister of finance of Quebec also wishes to see taken into account the effect of the change on the economy of Quebec and its technological development.
The entire banking sector is one that is heavily impacted by technological change, but it is also one with a domino effect on business. When, for example, there is a decision to lend money to businesses to enable them to conform to new technological requirements, in order to be in a competitive position, the lenders must be in place and prepared to take actions that reflect the particular context of Quebec. To that end, we feel it is important to follow up on the recommendation by the Quebec minister of finance.
The last characteristic, the last condition set by the Quebec minister of finance is the effect of change in the financial sector of Quebec and the role of Montreal as a financial centre, particularly as far as keeping final decision making centres in Montreal.
I believe these are four important criteria which the federal government must take into account and which are absent from this bill at the present time.
As I said at the start, this is an important bill. Changes will not be made overnight. Once passed, it will set the framework for financial institutions in Canada for many years to come. It seems important to me that Quebec's distinctiveness be taken into account and treated along the lines of the interests of Quebec as opposed to those of the Minister of Finance of Canada, which are very different.
I would also like to emphasize another point made by the minister of finance of Quebec, who wrote:
We think that the legislation should include mechanisms to ensure that measures are enforced to safeguard against the adverse effects of allowing an individual to hold more than 20% of the voting shares of a bank in aforementioned areas.
So, through its finance minister, the Quebec government clearly cautioned that major changes must be made to the legislation. The Bloc Quebecois is opposed to this bill and will eventually vote against it, if these amendments are not incorporated into the bill per se.
As we know, bills have been put forward, including one by the hon. member for Hochelaga—Maisonneuve, dealing with community reinvestment, inspired by a practice existing in the United States, whereby banks are required to have some sort of social mandate.
As the hon. member for Trois-Rivières was saying earlier, and this is true as well in all the regions of Quebec and probably all the regions of Canada, concentration in the banking system today has the following consequence: if there were no credit unions in several regions of Quebec, a local banking system would simply no longer exist. This is because, in the past, banking operations were based solely on economic and financial criteria, without any concern for the social implications of these operations.
I think we had an ideal opportunity to include in this bill some major elements of the bill on community reinvestment introduced by the hon. member for Hochelaga—Maisonneuve.
I think we could have taken a page from the American experience and applied it to the Canadian system. In a few years, we would have realized that, instead of seeing our regions abandoned by the banks, as we have seen in the last couple years, perhaps they would have come back to this market in accordance with the requirements of the act.
This bill is the result of major technical work. With this bill, some cleaning up is being done, but there are still major points that need to be corrected, and not enough is being done.
Indeed, the Bloc Quebecois considers that no concrete measures have been taken to give the poor greater access to financial services, as I was saying when I spoke about community investment.
The Minister of Finance has chosen to unilaterally decide the future of Quebec banks. Figures have come out lately and we have seen what is being done with the surpluses in Canada. Last year, the Minister of Finance announced a $3 billion surplus, which will actually reach $12 billion. This was well known from the beginning. But to avoid a debate on the way this surplus should be used, the budget forecasts were fudged.
With this new law, the Minister of Finance will have even greater powers, and I find this dangerous. For instance, the bill is full of expressions like “the Minister may, if he deems it necessary” or certain clauses could be applied “if the Minister so decides”. In other words, this bill can be made to say whatever the federal government and the Minister of Finance want, in terms of deciding on their own the future of Quebec's banks, among other things. This is unacceptable.
The main point is that, under the bill, in a bank like the National Bank, a single shareholder could, with the approval of the Minister of Finance, hold a 65% interest in the National Bank, the largest Quebec-based bank.
The Minister of Finance does not need to allow this kind of excessive control to give the National Bank the flexibility it requires to continue to prosper. Why would a situation where a shareholder owns 65% allow more flexibility than one where a shareholder owns 1%?
In the future, this could prove to be very dangerous. The Minister of Finance has not thought this through. Some legislative guarantees are needed to prevent any negative impact these new ownership rules might have on employment of professionals, consumer services, small businesses, decision making centres, and the role played by Montreal as an international financial centre.
It is not obvious that this bill will bring about healthier 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.
The Minister of Finance has decided to draft legislation benefiting the major banks. However, if that means sacrificing Quebec banks like the National Bank, which is the institution for small businesses in Quebec, he is surely aware that if he does not amend his law he will not have adequately met the needs of Quebecers or their desire to have a financial system that works for them, instead of the financial system.
Let us go back in time. Before 1960, Quebec had few experts who could see and understand the importance of all that. Since 1960, since people like Jacques Parizeau helped create the Caisse de dépôt et placement du Québec, since Quebec acquired such instruments as the Fonds de solidarité des travailleurs, and the Fonds d'actions de la CSN, many management tools have been developed. We are now aware of the power of money. We now know that we can get tools that would help us make the best possible decisions in the interests of Quebec.
The bill before us is something we are quite familiar with. There are in the House sovereignists who want Quebec to have at its disposal the best possible tools to build its future. The day Quebec becomes sovereign, we will inherit a lot of federal statutes during the transition period and this will be one of the most significant. We might as well pass good legislation that is in the interests of Quebec and would allow Quebecers to get down to business the day after the referendum is won, without having to correct too many mistakes made under the federal system.
This is why we carry out our duties in the House. We will criticize this bill and come up with some amendments so that we end up with a bill that is much more acceptable for Quebec and for the rest of Canada, one that would give us the tools we need.
I also want to take this opportunity, at second reading, to talk about consumer protection. The Minister of Finance remains quite vague on this issue. In my mind, what he says sounds more like wishful thinking than a strong political will.
It would be in everyone's interests for us to consider this bill in detail and bring forward appropriate amendments. This bill establishes the Financial Consumer Agency of Canada, the objective of which, according to the minister, is to protect consumers.
The Bloc Quebecois has long been recognized as a champion of people's rights. We have had important debates on these issues, including on the Privacy Act, where was shown that the federal government had passed legislation that would not meet its objectives and that would have to be reviewed before long to ensure proper management of personal information. We have seen the results of such a piece of legislation.
Internal management of information networks within the government is totally inadequate. I received at home some information from the Department of Human Resources Development. In its big brother database I am registered as working in the processing industry in Ontario. A lot of the information sent to me was false.
So I had to send it back to the government saying that the information was false and had to be corrected. But that information had been going around for years. It was used in studies, and we did not even know what kind of information the federal government had about us.
This same government that is unable to manage its information properly brought in Bill C-56, which became Bill C-6 regarding the protection of personal information, and it did not go nearly as far as Quebec went in its own legislation in that area.
That is why we have our doubts about the finance minister's desire to really protect consumers. The financial consumer agency will create numerous regulatory overlaps with measures already taken by Quebec in this area. In any event, it is a sector which comes under the jurisdiction of the provinces, of Quebec.
This same bill makes provision for a low-fee retail deposit account, which the Minister of Finance says will ensure those with low incomes accessibility to financial services.
No one knows exactly what this low-fee retail deposit account is, except for the minister. We have not been able to get a good definition of it. No one knows who would be entitled to such an account, except for the minister, and no one knows whether this account will be available everywhere, except for the minister. It would be nice if we knew a bit more.
This bill gives the minister considerable discretionary power. What is more, in a definition that is important for those with low incomes, we do not know exactly how it will be managed. Since the legislation is revised only once every ten years, it would have been good to have this spelled out off the bat.
Why is this not known? Because everything will be defined by regulation. For the moment, we must be satisfied with what the minister has told us since we are unable to get at the meat of it.
In conclusion, if the proposed legislation is to be acceptable to Quebec, it will need to contain important legislative guarantees not now present. The most flagrant example is what will become of the National Bank if the present wording of the bill is not changed. The minister is given far too much discretion, considering the guarantees he has given us in the past.
Quebec must not find itself at the mercy of Canada's finance minister. I think that major amendments should be moved and accepted by the Liberal majority, so that in the end we will have legislation on reform of the financial system that meets a number of conditions, both for Quebec and for Canada.
I suggest that members read what the president of the National Bank had to say. He thought it could be a bit higher than 20%—say even more than 40% or something like 49%—but this all has to be discussed.
As far as the 65% is concerned, I think that control of anything more than 50% of the National Bank, as provided for by this bill, is a bad thing. The bill will have to be amended within two, three or four years or it will put undue pressure on the finance minister.
The current finance minister will certainly not be around until the end of this century. Two, three, five or ten years from now, we may have another finance minister. Other Canadian governments will make other choices, and we might not necessarily be able to trust the finance minister fully.
I believe the current minister has already shown us that, as far as surplus management is concerned, we should not trust him. Nor can we assume that his successors will be any better. It is essential that Quebec's Banque Nationale be provided with legislative protection.
This is an important bill, legislation that will not be reviewed for several years. This bill proposes many significant changes. There are constructive ideas on the table. The government of Quebec gave us advice and warnings regarding the conditions required.
I hope that the federal government will act responsibly, that it will take the time to study these amendments, that it will agree with our arguments and that it will make some changes so that Canada's financial system will be well accepted by all sectors. It is important to be able to trust our financial system and, consequently, that this system reflect a consensus. We have not reached that consensus yet. Such a consensus would enable us to have the financial tools that would help us face globalization and the challenges that lie ahead of us.
It is important that we give these tools to every family and every person working in our regions.