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House of Commons Hansard #118 of the 36th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was finance.

Topics

Financial Consumer Agency Of Canada ActGovernment Orders

3:45 p.m.

Bloc

Gilles-A. Perron Bloc Saint-Eustache—Sainte-Thérèse, QC

Mr. Speaker, Rivière des Mille-Îles is one of the most beautiful rivers in Quebec and it is located in the Montreal region. I must invite you to go down it by canoe in August. The downriver excursion is a very popular event; this year more than 4,500 people took part. My riding is along the shores of this lovely river.

Let us talk of something other than lovely rivers, even it is a whole lot more interesting to talk of Rivière des Mille-Îles than Bill C-38.

When I hear the Minister of Intergovernmental Affairs boast about how well things are going in Quebec, I realize he is not being realistic. I tell myself he is not coming to see the day-to-day situation.

His riding is located in the heart of Montreal, so where is the Minister for International Trade?

Yes, things are going well in Quebec. But if I were a federal government member or minister, I would not brag, because Quebecers are the ones who are doing all the work. Considering all the money that has been taken from the social transfers to the provinces since 1993, the minister should know that if we have a balanced budget in Quebec, it is not thanks to Ottawa's help. Heavens no.

Let us now deal with Bill C-38. It is true that I read it quickly, but I spent enough time on it to come to a conclusion. Upon reviewing this bill, I came to the conclusion that, in his proposed bank reform, the Minister of Finance is assuming, through Bill C-38, the right to be the only one to decide the future of banks in Quebec. If this is indeed the case, then it is truly worrisome.

If my interpretation of this bill is right, if the minister is assuming this right, then it is really scary.

My colleague, the hon. member for Drummond, delivered a brilliant speech, which shows that she came well prepared. Does she share my impression that the Minister of Finance is assuming the right to be the only one to decide the future of banks in Quebec?

Financial Consumer Agency Of Canada ActGovernment Orders

3:50 p.m.

Bloc

Pauline Picard Bloc Drummond, QC

Mr. Speaker, my colleague is absolutely right. This bill is very lengthy one that runs to 900 pages. It is also very complicated.

Some of its provisions state that the minister, one person, has the final say on certain operations. When we read the bill, we notice that there are many provisions where the minister can decide arbitrarily, on a whim, when it suits him. He decides to accept or not. Nobody knows what his criteria are. We know nothing. He does not say nothing. He is assuming the right to be the only one to decide.

That is what the government did with Bill C-20. It has ignored Quebecers and our institutions and wants to be the only one to decide the future of Quebecers.

Financial Consumer Agency Of Canada ActGovernment Orders

3:50 p.m.

NDP

Louise Hardy NDP Yukon, YT

Mr. Speaker, I will be sharing my time with the member for Winnipeg Centre.

I am pleased as well to speak to Bill C-38 which involves financial sector reform, a bill, as has been mentioned, that is 900 pages long and certainly deserves thorough scrutiny.

It was interesting to listen to the Minister of Finance today during question period talking about generational debt. This is a man, along with our Prime Minister, who was in the House in the eighties and nineties when that huge debt was created and a large part of it is due to compound interest.

He was talking about this generation and himself as someone who was going to be a saviour. It was in fact our parents and the men and the women who were in the war and lived through the depression. They made sure their children went to school and got an education. They made sure there would be pensions, unemployment insurance benefits and housing programs. They made sure that people would have homes and that they could afford the gas and the heating fuel to keep their houses warm.

Here we have a government that has slashed and burned those programs. It was not the social programs that caused the debt. It was, as I said, compound interest that was paid to financial institutions in the eighties and nineties that caused the debt to spiral.

I agree that we have a debt and that it needs to be paid, but we also have a debt to the homeless and to the people who are on emergency lists at hospitals. People are dying because they are being turned away from emergency wards. Those debts are far more important than the debt to private institutions such as banks.

We have a finance minister who has been visibly taking public money and transferring it into private hands and we have no say. The big announcement of an extra $12 billion goes right to the banks. Nobody in the House has any say over how that money will be treated, who it will go to or who it should go it. It is completely out of our hands. That is reprehensible and shocking when we have other debts besides financial debts.

These financial institutions are the most privileged, profitable and wealthy institutions in Canada but they pay very little tax compared to the profits they make. They put nothing back into their communities. The bill will not require them to reinvest in their communities. They will be able to pull out of communities and end banking services at will without any recourse for the communities involved.

The New Democratic Party, just on principle, does not support the bill. There are things in it that are worth supporting but not in comparison to what is not worth supporting. We do support the expanded power to credit unions. We think it is important to modernize financial institutions and make sure there is better competition for insurance companies. The bill will provide more power to the House of Commons in bank mergers.

It seems that this huge financial bill went through a screening in a backroom committee where no elected official or average Canadian could have a say. I do not know about most members of parliament but I do not know any wealthy people. Most of the people I know barely make it from month to month, paycheque to paycheque and being able to buy shoes for their kids for the start of school. Most of us do not have any access to the world of privilege or wealth.

We in the NDP do not support the bill because it abandons the wide ownership rules and it will lead to a concentration of power into a few hands. We do not need more public money going into private hands or more public power going into private hands. In a democracy we want to keep power where it belongs, in the hands of the people as much as possible.

The bill also gives far too much power to the finance minister. Why would we want to do that when he already has enormous power? Why would we want him to have that much power over the way we exchange goods or the way we make decisions? In fact, very few of us can get away from a world that depends on money. The minister will have a final say on mergers, acquisitions, regulations and ownership levels, and that is just not acceptable.

There will be no accountability between a bank and its community. As do some states in the United States, the bill will not require banks to reinvest in the communities where they have made their money. Banks make their money off our money. There will be no guarantees of rural access to banking. We cannot stop bank closures or provide no cost accounts. It reduces capital requirements for small banks and there is no control on high risk derivative products or off balance sheet liabilities.

In 1999 our Canadian banks made $9.1 billion in profits. That kind of money seems unimaginable to the average Canadian when they pay $2 billion in federal tax. The banks also got a 7% reduction in corporate tax in the 1999 budget.

As I said, banks are privileged but they do need to be dealt with fairly. The financial sector does have to be reformed but it should not be reformed at the expense of the individual Canadian who has a very hard time going to the bank. Small businesses struggle when approaching banks for loans. They could at least invest in our communities.

In closing, I want to say that we in the NDP oppose on principle second reading of Bill C-38.

Points Of OrderGovernment Orders

3:55 p.m.

Reform

Jim Abbott Reform Kootenay—Columbia, BC

Mr. Speaker, I beg your indulgence. As you know, following question period I raised the issue of a report that had been referred to by the Parliamentary Secretary to the Solicitor General. I indicated that my understanding of the practice and procedures of the House was that because he did not refer specifically to the report, I could only request that it be tabled.

I have had an opportunity in the intervening period—and this is the first opportunity I have had, which is why I beg the indulgence of the House under this point of order—to review the blues.

The Parliamentary Secretary to the Solicitor General said “I am pleased to report to the House today that review is now complete”, referring to the SIRC review, “and has been submitted to the solicitor general”. This is important. He says “There are three points in that submission that I would like to refer to all members of the House”. He is referring to points contained in the report. He continues, saying “The first is that there was no political interference as alleged in the media. The second is the draft report in fact indicated it was deeply flawed. The third is that there is no evidence of any substantial nature that was part of that draft report”.

In his response to my supplementary question, at the conclusion of his response I refer you to the sentence where he stated “The facts today are evident and they are presented here in the House”.

I refer to the House of Commons Procedure and Practice , page 518, chapter 13. I would like to read a portion of a paragraph pertaining to tabling of documents and speeches.

As Speaker Glen noted in a 1941 ruling, “an honourable member is not entitled to read from communications unless prepared to place them on the Table of the House. The principle upon which this is based is that where information is given to the House, the House itself is entitled to the same information as the honourable member who may quote the document.”

Mr. Speaker, my argument is simply this. I recognize that I have not had an opportunity to call the parliamentary secretary's office but I did want to be on the record as early as I possibly could, at the earliest possible moment, and move from making a request of the government but rather to state that the government really must follow parliamentary practice where clearly the solicitor general's parliamentary secretary kept referring to these documents.

At the risk of being too repetitious, I am going to read this again. He said “There are three points in that submission that I would like to refer to all members of the House”. Then he elucidates on those three points.

I note that there is a House official for the government in the House today. I therefore request that he undertake to see that this SIRC review which was submitted to the solicitor general, which I have subsequently found out was submitted about a week ago, is tabled forthwith.

Points Of OrderGovernment Orders

4 p.m.

Liberal

Bob Kilger Liberal Stormont—Dundas, ON

Mr. Speaker, respectfully, I am not totally familiar with the incident being raised by my hon. colleague from the Canadian Alliance. However, I would expect and hope that in the usual wisdom of the Chair the parliamentary secretary in question, the Parliamentary Secretary to the Solicitor General, would have an opportunity before yourself in the Chamber to give the appropriate explanation, and based upon and following a decision by the Chair, certainly appropriate action might be taken.

Points Of OrderGovernment Orders

4 p.m.

The Deputy Speaker

The Chair indicated when the member for Kootenay—Columbia raised this issue earlier that that is exactly what is anticipated, that the parliamentary secretary would take the matter under advisement. I presume that either he would table the document or come in with an argument as to why he should not table it. That is still the position of the Chair.

I thank hon. members for their submissions and I look forward to hearing from the parliamentary secretary in due course.

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

4 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I was wondering if it was appropriate to have questions and comments on the debate of the member for Yukon.

Financial Consumer Agency Of Canada ActGovernment Orders

4 p.m.

The Deputy Speaker

No one rose and that is why I am moving now to resuming debate. The hon. member for Winnipeg Centre has the floor.

Financial Consumer Agency Of Canada ActGovernment Orders

4 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I appreciate the opportunity to join in the debate on Bill C-38.

Not everything we do in the House is really of enormous gripping interest to every Canadian. I know that comes as a surprise, but this bill is being followed very closely by Canadians. Most Canadians have a strong opinion on the state of the Canadian banking sector and the financial institutions that Bill C-38 seeks to regulate.

In fact most Canadians feel very strongly about Canadian banks. Most Canadians think that Canadian banks are greedy and bloated institutions that are not really serving the best interests of Canadians. That is why they anxiously awaited this legislation.

They waited patiently while the MacKay task force studied this country's financial institutions in great detail for over two years. That report was finally presented to the Minister of Finance. He chose to implement many of the recommendations which have now found themselves into Bill C-38.

Things that the MacKay task force dealt with covered many of the concerns that Canadians have. Many Canadians came forward and made representations to the task force. Even through their members of parliament they have come forward to complain bitterly about the inadequacies in the Canadian banking sector. They have complained bitterly about the closing of local banks, whether they are in the inner city of Winnipeg, which I represent, where services are being arbitrarily shut down, or in rural Canada. We heard the Tory member speak passionately about how frustrating it is for the people in rural Nova Scotia who see their local branches being shut down, things they came to expect from our chartered banks.

We have to remember that the chartered banks enjoy a privileged status. This is not any old business. This is not a Home Hardware that can decide to build a new store in one place and shut down another one somewhere else. That is completely its business; it is a completely private institution. The chartered banks are privileged in the sense that we guarantee them a certain amount of business and a certain amount of profit. In return they owe us a certain amount of service. That was the deal. That was the tacit agreement between the Government of Canada and the chartered banks. That is why they are chartered. But they have broken their promise time and time again.

In an era of unprecedented record windfall profits, what do they do? They shut down the local branches so that seniors and inner city people in my riding at least do not have access. In the inner city of Winnipeg over 20 branches from all of the five chartered banks were shut down. Branches were shut down arbitrarily.

The banks increased service fees. With record profits one might think they might be able to lighten up on the service fees perhaps. They have eliminated jobs. Every time a branch closes, jobs are usually eliminated. They have installed ATMs rather than personalized service, which many seniors are frustrated by, and then they have the audacity to charge customers every time they use the ATMs. The banks are saving a fortune in salaries by putting in those machines and then they have the unmitigated gall to charge a fee every time they are used.

These are real frustrations that Canadians have brought to the attention of members of parliament. They had hoped they would have been addressed in a document like this bill.

A number of shareholders are getting very active. Mr. Speaker, I do not know if you have ever been to a shareholders meeting of a major chartered bank, but I have. I crashed two of them last year. I say I crashed them. I borrowed some proxy votes and I visited them in the company of a wonderful man from Quebec, Mr. Yves Michaud, who is a champion of shareholder rights and of Canadians' rights in this regard. I think he is a Canadian hero and should get the Order of Canada for what he does. He goes to every one of those shareholder meetings of the chartered banks and he moves motions and amendments to try to democratize the corporate structure there and to force the banks to be more accountable to the needs of Canadians. It is kind of fun.

There were 1,200 people in the room all looking at their shoes. One would think it would be a democratic process where anybody could stand and move a motion or an amendment. Only nine motions were moved. All nine were moved by Mr. Michaud and seconded by me. That was it for the whole program of the day, believe it or not. In a room of 1,200 people one would think there would be more interest in how the banks are run but they were all as quiet as mice pretending nothing was wrong with their financial institutions.

One of the motions we moved was to limit the executive salary of the CEO to 20 times that of an ordinary teller. Frankly, that is still a whack of dough. The average CEO in Japan makes 13 times that of an average worker. The average CEO of a Canadian chartered bank makes 220 times that of an average worker. It is unbelievable. That motion failed. It did not succeed.

Another motion almost succeeded. We wanted gender parity on the board of directors. The result of that vote was 49.6 to 50.4, numbers we might recognize as they are exactly the same numbers as in the last Quebec referendum by some happy coincidence. That one failed just by a little.

Another motion we moved was to limit the number of boards that a director can sit on. George Cohon, the CEO of McDonald's, sits on 54 boards of directors, including the chartered banks. They meet 10 times a year. How can someone possibly attend some 550 board meetings and make intelligent rulings about how the organizations should be run? I do not think it can be done. That is why there is a paucity of ideas and accountability at the top level of the banks. Those guys just sit on the boards and they vote each other raises. I am sure of that.

We moved a motion to limit the number of boards of directors a person is allowed to sit on to no more than 10. That one did not succeed either.

It was an exciting exercise in trying to democratize the corporations. As governments lose power and lose their ability to manage the economy and the corporations take over more and more, the only way we are going to have any democratic say is if we democratize corporations. Frankly these corporations run above and beyond the dictates of truly elected parliaments like this one.

Most Canadians think that Canadian banks are not good corporate citizens. They are disappointed in the performance of Canadian banks. They do not give a hoot about mbanx. They want them to pay mtaxes. That would be better than having mbanx. How about some mtaxes from the Bank of Montreal?

One thing I will say is that John Cleghorn was a much better sport than Matthew Barrett. Matthew Barrett was really nasty about these amendments, especially the one about limiting his salary. Cleghorn at least got a chuckle out of it.

Canadians think that chartered banks do nothing but take and take and take and never give anything back in return. That is the image. It is the old Snidely Whiplash image with the top hat and handlebar moustache taking the mortgaged family farm at the first sign of danger. That is the image.

The banks have a big job on their hands in terms of public relations. They are spending hundreds of millions of dollars trying to convince Canadians that they are of warm, fuzzy, caring institutions that are fun to do business with. They are anything but. It is almost as absurd to watch the Liberals trying to paint themselves as the party of the centre left and the champions of health care. It is almost that absurd and that big of a stretch that Canadian banks flounder around trying to pretend that they care.

Ask any small business in Canada how much the banks care in terms of providing venture capital. They will not lend someone money unless it can be proven it is not needed. Even when they do, at the slightest hint of any trouble in the business, they just demand the loan. They call the loan, pull it right out from under it and another small business collapses.

We were hoping that Bill C-38 would have something like chapter 11 in the United States. I hate to look to the United States for ideas; it bothers me. However the United States at least has this sanctuary that a business can hide out in when the banks are trying to blow down its house. Chapter 11 is an interim stage before bankruptcy. The business calls its chapter 11 status and the banks cannot touch it, at least temporarily. We would have welcomed that.

A good example of how unbelievably and unabashedly greedy the banks have become is student loans. One of the obligations that was passed on to the banks in exchange for the exclusive privilege to do all the credit card transactions and the billions of dollars they get from that was to handle the student loans program. They handled it for a couple of years and they were not making enough money so they tried to dump it and get out of it.

Our party believes there should not be student loans because there should be free tuition. Nobody should be paying tuition to go to university, but that is another issue. If I were in charge of a $12 billion surplus, the first thing I would declare would be absolutely free tuition for every Canadian student. We can afford it. It would cost $3 billion a year. It would be a great idea. We would not be putting our students at the mercy of ruthless, greedy and bloated bankers who take advantage of them. I do not think that is in anybody's best interests.

Financial Consumer Agency Of Canada ActGovernment Orders

4:10 p.m.

Bloc

Yves Rocheleau Bloc Trois-Rivières, QC

Mr. Speaker, I would like to congratulate the member for Winnipeg Centre on his speech and thank him for his kind words about Yves Michaud. Mr. Michaud deserves to be praised because, in view of his age and his career, he could very well be enjoying a peaceful retirement and thinking only of his family and of himself.

However, he prefers, since he does it so well, to take the side of the small shareholders, the small investors, and vigorously defend the often difficult cause of these people with those who we might call “those financial monsters”, the banks and the Canadian financial system, with increasing success. To my way of thinking, it is very encouraging to see how the challenge Mr. Michaud set for himself is evolving and to see his success.

It is a bit like the successes, in educational terms, the sovereignists have enjoyed in Quebec since the 1960s by explaining to the public the merits of the sovereignist proposal. This is what Mr. Michaud is doing with respect to the banks by racking up successes and a better understanding over the weeks, months and years.

I think this, from the member for Winnipeg Centre, is very flattering for Mr. Michaud, who certainly deserves it.

I would like to ask my colleague from Manitoba how he would react if one of the major Canadian banks were located primarily in Manitoba and doing a growing business, as is the case of the National Bank in Quebec, and he learned, as we Quebecers did, that the Minister of Finance has a particular plan in mind for Quebec's National Bank, the bank for small and medium business, by giving it distinct society status in the present instance, by opening the door and pulling out all the stops to enable any foreign company to acquire 65% of the shares of Quebec's National Bank, instead of limiting foreign ownership of it to 20%.

How would my dear colleague react if this were a Manitoba bank?

Financial Consumer Agency Of Canada ActGovernment Orders

4:15 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I believe that we would react very negatively to any intrusion of that nature. The possibility of losing our economic sovereignty is only one step away from losing our sovereignty, period. I know the people of Manitoba and Canadians generally do not want to see the takeover of their institutions by foreign enterprise and foreign agencies. The 10% rule was put there specifically to stop the Chase Manhattan Bank from taking over the Toronto Dominion Bank in the 1960s. It was put there for the very specific reason of trying to shield one of our Canadian institutions from an unfriendly corporate raid by American interests.

I can honestly say to the member for Trois-Rivières that we would react very negatively if we were faced with similar circumstances as he outlined in the province of Quebec and the Banque Nationale.

Financial Consumer Agency Of Canada ActGovernment Orders

4:15 p.m.

NDP

Dennis Gruending NDP Saskatoon—Rosetown—Biggar, SK

Mr. Speaker, I want to congratulate my colleague from Winnipeg Centre on his speech. I could not have done better myself and I really mean that.

I also want to share with him some information which came my way this summer. It was really heart-rending to get calls from farmers who were in danger of losing their land and of having their mortgages pulled. It was very heart-rending and difficult to deal with but not nearly as difficult as what they face.

Second, the hon. member mentioned the banks walking away from the administration of student loans. I can tell him that just recently the chartered bank which had been doing that work in Saskatchewan gave notice that it will no longer do it because it is not profitable enough.

My colleague mentioned that the banks have been given many benefits. In some ways they are almost treated like an extension of the crown. However, they have a corporate and social responsibility on the other hand from which they often walk away.

I want to ask my colleague about the Community Reinvestment Act. The New Democratic Party had that in its 1997 platform because it was very clear to us that many people who really needed loans, as my colleague said, could not get them because the banks were not prepared to lend to them.

Could he elucidate and give us a bit more detail on what I believe to be the wisdom of that kind of legislation?

Financial Consumer Agency Of Canada ActGovernment Orders

4:20 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, the Community Reinvestment Act is an American idea that works very well in large American cities. Banks are obligated to reinvest a certain amount of their profits into community enterprises or small businesses or start-up businesses that otherwise might not have qualified for a loan under a more traditional setting and certainly would not have qualified for a loan in Canada.

Sometimes they are funding non-profits or giving bank loans to groups that otherwise would not qualify. In some small way at least the banks are repaying for the privilege they enjoy as a chartered bank in this country. We are disappointed there is no reference to it in Bill C-38.

Financial Consumer Agency Of Canada ActGovernment Orders

4:20 p.m.

Bloc

Yves Rocheleau Bloc Trois-Rivières, QC

Mr. Speaker, I am very pleased to participate in this debate on an important piece of legislation to reform the Canadian financial system.

When dealing with the Canadian financial system, we should be aware that we are dealing with day to day operations, the savings of Canadians, the economic activity that should exist in all communities where there are institutions where we can make transactions and deposit our savings. This kind of bill is a matter of bread and butter and it concerns the economic activity.

In that sense we could perhaps take the government to task for not doing enough publicity and raising public awareness of the importance of this bill, which is the end result of a long process. It is not easy to amend the Bank Act. Extensive consultations are necessary. It seems to me more thought should have been given to raising public awareness.

Something struck me when I read the bill. I would like to bring a number of points to the attention of the House, starting with the regulatory authority the bill is giving to the finance minister.

When we talk about regulatory power, just as when we talk about the privatization of public agencies, we are talking about loss of control, the loss of the right to have a say in these matters for parliament, parliamentarians, the elected representatives that we are, and therefore a loss of control for the people, the Quebec people and the Canadian people, because things will be done mostly through regulations. That is the bureaucracy.

I believe this is a threat to democracy about which we make great claims. We are very good at telling people how to administer themselves. Canada takes great pride in doing so. In certain respects it may be right, but it seems to me it should be more concerned than it is about ensuring that the elected members of parliament do not lose their powers so systematically and regularly.

You know as well as I do—and the matter is being debated in university circles—that constitutional experts are increasingly worried about the loss of power experienced in democracies by the people and their representatives. It is indicative of a certain form of disregard for the democratic system to which we owe our presence here.

There is another point that strikes me: this reform is taking place in a context fraught with contradictions—my colleague from the NDP alluded to this earlier—and we are asked to stand by somewhat passively. As consumers we are even more powerless and victimized. I am referring to the decrease in banking services in general, the decrease in the number of business hours and the increase in service charges, which is a contradiction in view of the decrease in services.

I am also referring to job loss. This is another contradiction since banks are raking in huge profits, record profits that are piling up year after year to the tune of several billions of dollars; and the very same month, they have the nerve to announce they are going to lay off dozens, hundreds, thousands of bank employees as a result of a streamlining effort that might be justified. This is a tragedy across the world.

And this brings us to another characteristic of banks, which is their symbolic value. People talk about neo-liberalism, with its internal logic, the infernal logic of modern capitalism whereby profits are never high enough and must always be boosted. It has now reached the point where if the expected profits do not materialize, it is the stock which takes the hit.

So there is a logic which is increasingly uncontrolled and which seems uncontrollable whereby life, for those who work, must be infernal, when one is subject to such pressure, always in the name of the great diktat of money, profit and profit for profit's sake.

One gets the feeling, in the development strategy of all the banks, of the entire Canadian banking system, of an attempt at rationalization which is far from being to the benefit of consumers, which is far from being to the benefit of users, which is far from being to the benefit of employees, and which is aimed solely at profit, for example, perhaps going beyond what shareholders are asking for.

Some interesting studies could be done of this because social peace, quality of life, harmony and distribution of wealth are concepts that so-called civilized societies such as ours hold dear. Some surveys are perhaps in order. They would show that the big anonymous managers of this world, with their red suspenders, would perhaps do better to develop greater sensitivity to people's real expectations, to get a better read on the aspirations of the public in general.

There is one specific area that is somewhat related to this, and to which my colleague has referred, something dear to the heart of my colleague from Hochelaga—Maisonneuve: the community aspect. There is one striking aspect, in particular in the eastern part of Montreal: branch closures. It seems that it could be demonstrated that the poorer the population, the more bank branches are being closed, and thus the fewer tangible, physical services are being provided.

The physical accessibility of services to the public is being decreased, services to people who are already disadvantaged, who may have difficulty getting around and may not be able to afford to. Perhaps they have to take a bus or the metro to a bank that is further away because their local one has been closed, thumbing its nose at customers and their needs.

This is evidence of a management philosophy that must be deplored, a philosophy that is totally egocentric. In a sector that is totally pretentious, judging by its advertising boasting about its services to customers, while closing hundreds and hundreds of branches as is systematically happening with all the banks, I believe there are grounds for criticism and for wondering where things are headed, since once again this is all happening within a context of huge profits.

There is one other very troubling aspect to this bill: the discretionary power given to the minister to apply the legislation. When one reads something along the lines of “the minister may, if he deems necessary” and “if the minister so decides”, these are discretionary powers that are always cause for concern and always troubling. It should be made clearer. The minister's powers should be better defined, so as to be in a better position to criticize them, to assess the decisions made and the quality of the management, by the Department of Finance and its minister, of any issue.

This is a serious criticism, because discretionary power implies arbitrary decisions. And that is much more serious. It is even harder to protect oneself against arbitrary decisions.

Another aspect—and this refers to the question that I asked the hon. member for Winnipeg Centre—concerns of course Quebec's largest bank, which is granted special status. That bank is ranked sixth or seventh in Canada, but it does business almost exclusively in Quebec.

Quebec's National Bank is a bank that does not operate on as large a territory as the other major banks, but it is nevertheless a big bank. Under the bill, a single shareholder could buy its shares and hold a 65% interest in it, while the limit is 20% for the other banks.

Hon. members will realize that, for us sovereignists, the message is very clear. Some wonder what Quebec sovereignty is all about; they wonder why we should have the status of a province when we are subjected and dominated as a people, when, in spite of his great competence, the Quebec minister of finance can only make recommendations or suggestions to his federal counterpart, who may or may not take them into account. This is what being dominated is about. This is what not being a sovereign nation is all about. By contrast, if Quebec were a sovereign state, it goes without saying that Quebec's National Bank would not be at the mercy of foreign investors as it is about to be.

Hon. members will realize that there is a constitutional area and that the example I just provided is an illustration of non-sovereignty. This is what it would mean, among other things, for Quebecers who are listening to us.

There is another aspect to this issue in that the federal government is interfering in the area of consumer protection, something the Quebec government is already doing very effectively with its own legislation. Once again, the federal government is sticking its nose where it does not belong, which has become a habit.

In my opinion, this attitude fits in with the social union concept, with the new aggressive and determining role the federal government will play in the lives of Canadians in the next century. The federal government will be the real government, and the provincial governments will be nothing more than large RCMs, large regional county municipalities. That may be necessary for the good management of Canada. It is the problem of Canadians. But for Quebecers, it is a disaster.

If we stay in the federation, the Quebec government will lose some of its powers, it will become a large regional government and will have all of its legislation overruled, as it is already systematically being done and as is being done today with this bill.

The federal government is duplicating legislation that is working well, as it did yesterday with regard to endangered species, an area where Quebec has had its own legislation for years. That legislation has been very effective. The federal government has decided, without consultation, to legislate in the same area, totally ignoring everything Quebec may have done.

Therefore we must realize that this raises serious constitutional issues. The subject of the Banque Nationale is a good opportunity to talk about the Quebec model in the area of finance and venture capital.

Quebecers, as you might know and as I have come to notice when I was industry critic from 1993 to 1995, are the envy of many Canadians because of the tools we have in the area of finance. There is the Fonds de solidarité des travailleurs du Québec, the Caisse de dépôt et placement, the Société générale de financement and the wonderful Mouvement Desjardins, despite all the critics we can hear about it. Thank God it is there. If the Mouvement Desjardins did not exist, Quebec sovereignty could well be unthinkable. The Mouvement Desjardins is still a free organization, depending on Quebec resources only and we must be thankful about that. Then there is the CSN's Fonds de développement.

Being interconnected, all these organizations offer us a galaxy of stakeholders who can reduce the risks and who invest more and more in some high risk and high technology areas. Thanks to them, Quebec is amongst the best in the world in certain areas. I am thinking for instance of biotechnology and aeronautics. It is important to recognize it, what with Bombardier being the largest manufacturing corporation in Canada.

Thus, when the federal government interferes in this sector, it touches a very sensitive subject where Quebec, as in many other areas, has nothing to learn from our Canadian friends.

In closing, I too want to pay tribute to Mr. Yves Michaud, just like my hon. colleague for Winnipeg Centre did earlier. Mr. Michaud is a great Quebecer. A former member of the national assembly, he was a career journalist. He represented Quebec in Paris with great dignity. A cultured mind and a very eloquent speaker, Mr. Michaud made us proud wherever he went. Today, he is fighting a very important and extremely worthy battle to protect small savers and consumers against a huge monster, the Canadian financial system.

He has been scoring points. He has also been lecturing the financial establishment, which is really not a bad thing to do. Earlier, my colleague from the New Democratic Party compared the compensation package of the bank directors to the wages of the bank tellers. This is a very normal thing to do. When we compare ourselves to other countries, we see how far things have gone here.

We must give the credit to Mr. Michaud, despite some rather mean news reports recently aired by the CBC. Sometimes, in Quebec, we go for attack journalism. We had a good example then of the kind of petty journalism that members are probably aware of. Fortunately, Mr. Michaud used all of his fine qualities and eloquence to set things straight.

This is all I had to say. Obviously for all these reasons, unless it undergoes major changes, the Bloc Quebecois will be voting against the bill as it is and will be bringing forward amendments in due course.

Financial Consumer Agency Of Canada ActGovernment Orders

4:35 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I thank the member for Trois-Rivières for an excellent speech. I can certainly be proud to associate myself with most of his comments, but there is one thing I would like to hear him speak further on.

The results from most surveys of small and medium size businesses show that 45% of them say that if it were not for the lack of venture capital they could expand their businesses and create more jobs. In other words, the banks are not providing the venture capital that Canadian businesses need to expand.

The hon. member spoke to us about the Desjardins and Caisses populaires as being one institution that may fill those needs.

Labour leaders with vision, like the great Louis Laberge in the province of Quebec, founded the solidarity fund in that province. In our province we have what we call the Crocus Fund which is a labour sponsored investment fund using union money to reinvest in the community.

Could the hon. member tell the House a bit more about men with vision like Louis Laberge who had the foresight to put in place labour sponsored investment funds that I believe fill the need so well for venture capital? Could the member explain that process in his province a little bit more?

Financial Consumer Agency Of Canada ActGovernment Orders

4:35 p.m.

Bloc

Yves Rocheleau Bloc Trois-Rivières, QC

Mr. Speaker, I thank my colleague for his question.

I hope I am not mistaken, but when I was the critic for industry, it seems to me there was a clear difference between the situation in Canada and in Quebec as far as venture capital is concerned.

With the mechanisms we have set up in Quebec, we do not have any problem with venture capital. We have enough risk capital to finance most projects, something that would not happen in Canada.

The creation of the solidarity fund, for example, may have widened the gap even more. Since the same kind of initiative has not been taken in English-speaking Canada, differences have become even more striking, because we already have Desjardins, which is a powerful co-operative movement, whereas the credit unions in Canada are far from being as important.

The solidarity fund alone is as big as everything similar that could be found in the rest of Canada.

The venture capital problem is not the same. I do not think it is a real problem in Quebec, but, as the hon. member said, it is apparently a problem in the rest of Canada for 45% of business people.

Financial Consumer Agency Of Canada ActGovernment Orders

4:40 p.m.

NDP

Dennis Gruending NDP Saskatoon—Rosetown—Biggar, SK

Mr. Speaker, I also thank the member for Trois-Rivières for his incisive remarks.

There really are some similarities between places like Saskatchewan, where I am from, and many of the areas in Quebec. One similarity would be that there are many small towns in rural areas where if a bank closed down there would be a serious problem. Another similarity is that we share a strong credit union movement and it is very good that we have credit unions.

The member talked about bank closures in small communities, of which, as I have indicated, there are many in Quebec. Does he see anything effective in this legislation that would stop bank closures? We do not see it. I wonder if, from his reading of the bill, there is anything in the bill that would prevent the banks in any way or strongly hinder them from closing small branches at will.

Financial Consumer Agency Of Canada ActGovernment Orders

4:40 p.m.

Bloc

Yves Rocheleau Bloc Trois-Rivières, QC

No, Mr. Speaker. The reason this is one of the focuses of our criticism is that the bill provides only that the banks must give notice of a branch closure. In Quebec, if you lay off more then 10 employees, you must give notice. So there is nothing new under the sun.

In view of the need, the quasi essential role of the banks—we need banking services in our civilized society—under a sort of laissez-faire approach the banks manage this at their discretion. The situation is all the more unpleasant because this takes place in a context of huge profits, with staff being laid off all at once and services cut. So, if we put that all together, we come up with a rather unpleasant business.

We have a golden opportunity here to limit that, to make it more civilized. The law is made to civilize things a bit, but the government is missing the boat completely, because it says that the bank will simply have to give notice to those concerned, no doubt the Minister of Labour, in Quebec at least, when a branch with more than 10 employees not transferred elsewhere by the employer is involved.

So it is totally weak and rather hypocritical, because there is a problem. There are hundreds and hundreds of persons who have lost their jobs in the banking sector in Quebec, and the government is doing nothing to establish constraints to make the situation a little fairer.

Financial Consumer Agency Of Canada ActGovernment Orders

4:40 p.m.

Bloc

Paul Crête Bloc Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC

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.

Financial Consumer Agency Of Canada ActGovernment Orders

5 p.m.

Bloc

Francine Lalonde Bloc Mercier, QC

Mr. Speaker, I am pleased to speak to Bill C-38, a bill on the reform of financial institutions and banks.

This is a bill that has been talked about for a long time. Much has been written, much uproar has ensued. It has triggered much action and reaction, and one could say we are late in doing something, because globalization and the inevitable competition between major partners are among the challenges in the world context which is about to become ours, if it is not already.

On a number of occasions, the Bloc Quebecois has intervened in this regard. But here we are now faced with the bill as a fait accompli, and the government seems to be a rush to get it passed, so we are taking part in the debate.

I have not come with the bill in hand, since it is 900 pages long. It is not something everyone will read, but it is a bill that creates rights we find insufficient. We therefore wish to put on the record that, if the corrections we will be proposing at the report stage do not get through, we will be forced to vote against the bill. I do, however, wish to state right off that this bill contains a number of improvements with which we agree.

We note, for example, that the Minister of Finance has incorporated the recommendation made by Henri-Paul Rousseau that the financial institutions, insurance companies and various institutions be allowed to join together against foreign competition. He has added this to his bill, and we acknowledge that it was not in the original.

Let us now look at what is wrong, totally wrong, with this bill. First, I must say that, generally speaking, the powers given to the minister in the bill are way too broad and pervasive. Because of this discretionary power, there are still many provisions whose meaning remain unclear, since the minister may, on his own initiative, change what they appear to mean.

Generally speaking—and once again, the Bloc will propose amendments—we would like more clarity regarding the processes and also more specifics regarding certain concepts, such as the low-fee retail deposit accounts for the poor.

This issue of discretionary power is very important to us, especially since it will touch upon what is at the heart of our opposition, that is the transformation of the ownership rules for the National Bank, in Quebec.

Another aspect shocked us. The hon. members will understand that, having been my party's critic on Bill C-54 concerning the protection of personal information—which is, in fact, a provincial jurisdiction—I am extremely sensitive to the fact that this bill is again creating overlapping by directing how consumers should be protected. It is not that we do not want consumers to be protected when they deal with financial institutions, but we know that they are better protected by Quebec laws.

And there are many in this area. There are the Privacy Act, the Act respecting Insurance, the Act respecting Trust Companies, the Quebec Savings Banks Act and the Credit and Securities Act, to name a few. There is also the privacy bill, which is undergoing radical change in order to take into account the impact of electronic commerce. This is a very interesting bill.

Why oppose a bill supposedly intended to protect consumers? For an extraordinarily simple reason: because consumer protection legislation has to be simple and easy to understand and to enforce. It must be easy and simple for consumers to understand what their rights are and how they can ensure they will be upheld.

Quebec's privacy law is cited all over the world for its clarity, for the ease with which the citizens can win their case, and for its ongoing implementation in Quebec.

When a citizen has a problem and wonders “Under which act am I protected? What are my rights? Are these rights provided under the Credit and Securities Act or under the Privacy Act?”, there is a problem. This grey area, which could even make it possible to make a complaint under both acts, but also to miss deadlines at one point or another, is not a good way to protect consumers. The Bloc Quebecois will certainly follow this situation very closely.

I would be remiss if I did not talk about the whole issue of community investment. As my colleagues said before me, the hon. member for Hochelaga—Maisonneuve has conducted a remarkable campaign on the necessity for the banks to assume greater responsibilities in depressed communities and in isolated areas experiencing economic difficulties.

In fact, banks should systematically invest in communities, because they do benefit from regulatory protection. They should therefore agree to assume responsibility for the impacts of their activities on consumers, constituencies, regions, the environment and this, of course, in each of the provinces.

Our colleague argued that banks have an unfortunate tendency to avoid depressed communities and to prefer economically healthy areas. When they choose to stay in a depressed community because there are profits to be made, there is generally no correlation between the amounts of the deposits they take in and the amounts they give out in loans and cash advances.

Our colleague's system is based on American legislation passed in 1970, which completely changed the relationship between the banks and the citizens namely by forcing representatives of the citizens and of the banks to sit together and look at how they could help improve the situation of the most disadvantaged in the community.

We know that the first thing to do to help those persons is to allow them to open a bank account. That is the very first step. The bill provides for a low-fee deposit account.

However, since the application of this provision and its real content are not known, we say that until we know we are concerned, because I think everyone was made aware by the campaign, and at that time, not just by our colleague from Hochelaga—Maisonneuve, by the need to ensure that everyone can at least open a bank account.

All members know that this is far from being a sure thing and that the reasons given or not given have to do with income, length of employment, credit cards, which we can or cannot show, to prove our solvency.

It is an issue we consider very important, and we think that the bill would be vastly improved if it contained a provision that would permit something similar to what is done in the States—when the States has good things to offer, we should use them—that would permit dialogue as is the case with other businesses and other representatives of the public to ensure that these financial players help the poor.

The ombudsman is a step in the right direction, but it is far from enough. I note that up to now, the ombudsman has been appointed by the banks. When I sat on the Standing Committee on Industry, I heard the banks regularly defending their record on loans to SMBs. I myself bore witness to the fact that the ombudsman had good intentions, but lacked authority because he was appointed by the banks.

The points causing the greatest difficulty are extremely important for the Bloc Quebecois.

Since the majority of Quebec members are from the Bloc Quebecois, we can argue that we are talking on behalf of Quebec. We can question the change this bill makes to the ownership rule for the big banks. But where the ownership of the only big bank in Quebec, the National Bank, is concerned, we cannot support the change the Minister of Finance is proposing in this bill. We said so loud and clear and we will come back to this issue.

For the benefit of our fellow citizens watching the debate I would like to mention that up until now, the Bank Act provided for the splitting of the shares by prohibiting any single individual from owning more than 10% of the shares and having control over the banking industry, which could have been risky for businesses as well as for the economy and consumers.

Because of pressures exerted upon him and changes in the world economy, the minister has decided that a single shareholder can now own 20% as opposed to only 10% previously. You can rest assured that we will discuss and question this decision. That change affects the big Canadian banks only.

But why allow a single shareholder to own up to 65% of the shares of the only big bank in Quebec, the National Bank? When we think about all the risks this reform would involve, we do not understand.

Looking at history, we can see that Quebec has experienced serious problems over the years in exercising relative control over its economy. One of the main reasons for that, at the beginning of the century and before that, was the lack of capital. The popular phrase then was “French Canadian” or “controlled by French Canadians”.

According to historians, the collapse of Quebec-owned businesses after World War I was due to the fact that, because of the change and because of insufficient funding, all those businesses were bought by British or American capital.

Many economists—and I am thinking of the École des hautes études commerciales where so many economists and businessmen have received their training—began to understand that Quebec needed its own capital. Jacques Parizeau, distinguished professor at the École des hautes études commerciales, is among those who were taught by François-Albert Auger and others. So it is a good thing that we now have the National Bank and the Caisse de dépôt et placement, as well as the Fonds de solidarité and the Fonds d'actions, which came later.

We know that venture capital is now available in Quebec. The National Bank is one important element of this trilogy and we will not let it become vulnerable to foreign control, which could even lead to its dismantling. It could be taken over just to create competition. I will add that one extremely important characteristic of the National Bank is the fact that it caters to the needs of small and medium size businesses.

Of course other banks do get involved, but it is the small and medium size businesses' bank. We know to what extent they are part of the Quebec economy and its distinct nature. For this reason, we must protect the National Bank against being owned by one individual, which could result in a change in its original, main vocation, and worse yet in its being taken over by foreign interests.

We will fight tooth and nail to avoid this, and I believe Quebec and Quebecers will be behind us to oppose others who might favour interests other than those of the small and medium size businesses and their ability to access capital and use it through a bank such as the National Bank.

I could mention other elements of the legislation, but my colleagues and I wanted to stress the essential. The members of our party who sit on the Standing Committee on Finance will work very hard, as usual, but I wanted to say that they will have the strong support of all the members of the Bloc Quebecois and also, we are convinced, of Quebecers.

I might add that the Quebec government, through Mr. Landry, was very clear and suggested adding to the minister's discretionary criteria four other criteria that would be more definite and that would stress the link between the economic situation, employment and services. It is surprising that these criteria are not included in the basic criteria the finance minister is looking at in his bill.

Mr. Speaker, I thank you for your attention. It is always a help for us members of parliament, when we need to be convincing, to be able to address not the Chair, but the Speaker himself, who might even enjoy from time to time the fact that we are really addressing our remarks to him.

Financial Consumer Agency Of Canada ActGovernment Orders

September 20th, 2000 / 5:20 p.m.

Bloc

Yvan Bernier Bloc Bonaventure—Gaspé—Îles-De-La-Madeleine—Pabok, QC

Mr. Speaker, I notice that every time I rise in the House, you make an effort to remember the full name of my riding. I hope everyone will remember. You do so in French and your French is constantly improving.

After this bit of humour, I want to remind Quebecers who are listening to us—it is suppertime and some people like to play with the remote control—to make sure, before they eat their dessert, that they know what we are debating here today.

The bill before us will allow the federal Minister of Finance to decide the future of federally chartered banks in Quebec. What does this mean? My colleague, the hon. member for Mercier, explained it very well. The National Bank which, for most Quebecers, is the bank for small and medium size businesses, could come under foreign control. This means that its head office could be moved. These things could happen.

Those who are listening to us, in particular people in the Gaspe Peninsula, always want their member of parliament to come back home as often as possible, so as to keep informed of their problems. If, some day, I were to retire from the House and always stay away, how could I be aware of the needs of the constituents whom I represent? I realize that it is not quite the same thing for banks, but it is important to be close to one's customers. I am sure my colleague can comment further.

How could I, as a legislator, as the representative of the constituents of Bonaventure—Gaspé—Îles-de-la-Madeleine—Pabok, give a blank check—the expression is appropriate since we are talking about an act amending the Bank Act—to the Minister of Finance, when his bill is full of expressions such as “the Minister may, if he deems it necessary”?

He can do as he pleases, for Quebec and for the Gaspe. He can decide to do the right thing, but in six months we might suddenly have a different minister. Everyone is talking about elections. What would happen if there were someone else in the portfolio?

I do not want to ascribe bad intentions to the present minister, although sorely tempted, but if we change ministers, then what? If people want to make amendments, according to how they see things, and knowing their way of operating and how the electoral system works today, I would dearly love to see what contributions will end up being made to the campaign expenses of future ministers of finance. I will keep a list of them.

The banking system has influence. If we as legislators make the decision immediately, and leave as little as possible to the discretion of a Minister of Finance, which is I believe what the banks and small and medium business want, then we will be have some very clear rules to go by. I do not think that this bill as it stands is clear.

I will leave my colleague from Mercier to comment on this statement, but in my opinion it is not, at this time, worth the paper it is printed on.

Financial Consumer Agency Of Canada ActGovernment Orders

5:25 p.m.

Bloc

Francine Lalonde Bloc Mercier, QC

Mr. Speaker, as usual, the member for Bonaventure—Gaspé—Îles-de-la-Madeleine—Pabok has a way of putting things.

I think that we are going to hear this description again. No, we cannot give a blank cheque to the Minister of Finance when it comes to the future of the National Bank.

I repeat, the National Bank is the only Quebec-based bank. It is a mid-sized bank. It is smaller than the major Canadian banks. But it is Quebecers' major bank and it is the bank that finances small and medium size businesses.

I have been on the Standing Committee on Industry long enough to know that these businesses have tremendous difficulty getting financing from the other banks. The other banks prefer to make loans to the rich. The Bible warned us about this. We see it regularly.

So we must ensure that this bank remains in Quebec's hands, that it is not controlled by one person. Such a person could be from another country and could break it up and take it in a completely different direction, but he could also be a big industrialist who would want to change the rules of competition so that he would not have to make loans to small and medium size businesses that were not to his liking.

In no way can we agree to what this bill is proposing, for the economic health of Quebec, for the ability to retain control over the important part of the economy that these businesses represent, and we know that they are much more important in the economy in Quebec than anywhere else in North America.

Why does the minister not say that what is good for the National Bank would be good for Canadian banks? Why have departmental officials said that they are worried about control? If they are worried about control of the major Canadian banks if they increase the percentage of shares that may be held by one individual from 10% to 20%, it only makes sense to be even more worried about control if one person is allowed to hold 65% of the shares in the National Bank.

It is clearly unacceptable. We cannot even consider this proposal. It is ridiculous.

I say, like my colleague, that the Minister of Finance's intentions may be good. I saw a press release that said he wanted to help us. That kind of help we do not need. What we want is a rule that will guarantee us that control will remain in Quebec.

Financial Consumer Agency Of Canada ActGovernment Orders

5:30 p.m.

The Acting Speaker (Mr. McClelland)

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.

Income Tax ActPrivate Members' Business

5:30 p.m.

Bloc

Paul Crête Bloc Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC

moved that Bill C-211, an act to amend the Income Tax Act (travel expenses for a motor vehicle used by a forestry worker) be read the second time and sent to committee.

Mr. Speaker, the name of the bill is a bit unprepossessing, but I would like to summarize its intent.

Basically, it serves to allow forestry workers like those who work in my region—in the Basques, Saint-Jean-de-Dieu, Saint-Médard regions and throughout the Gaspé—who, in earning their living, have to go and work in Abitibi or on the North Shore and have to provide their own equipment, such as a pick-up, skidders, gasoline or a chain saw, to enjoy certain deductions.

The bill came out of a meeting with a forestry worker from Saint-Jean-de-Dieu and a meeting with several forestry workers, who work in this way.

The situation at the moment is that, with the partial deduction the law currently provides, they cannot make enough profit to make it worth their while working.

Right now, tax legislation discourages people from going to work elsewhere, and yet this is the only sort of job available. They would like a more appropriate tax deduction.

How can I say that the current legislation does not fully satisfy them? First, I wrote to the Minister of National Revenue on May 18, 1999 to ask for an interpretation of the law that allegedly permitted an appropriate tax rebate, a large enough tax credit to enable these people to get a tax deduction for travel costs. The law as it stands contains no such provision. The Minister of National Revenue confirmed this in his response to my letter of May 18.

I received a reply three months later and I wrote to the Minister of Finance on August 13, 1999, to tell him, since he is responsible for this issue, that a change to the act was absolutely necessary to allow these workers to have a decent income, to continue to work. Indeed, our tax laws must be an incentive to work, not a disincentive.

The Minister of Finance replied to me on September 30, 1999. Let me read two paragraphs from his letter:

In your letter, you ask if it is possible to consider these expenses as employment expenses, since there are some benefits related to working on a specific site or in a remote area that may be excluded from a worker's income, as long as they are reasonable.

The letter then explains that this somewhat changes taxation practices, but adds:

Even if the costs associated with transportation between a person's residence and place of work are not generally deductible, I submitted your concerns to the attention of my staff.

Today, I am very pleased that my bill can be debated in the House. This allows me to provide the Department of Finance with valid arguments to enable it to reach a conclusion.

On February 22, 2000, a few days before the budget, I asked the minister whether his staff had finally done the studies and reached a conclusion. Again, I got a reply from the Minister of Finance, but only in June 2000. That reply is still positive. The Minister of Finance says:

What constitutes a reasonable level of expenses for motor vehicles is a complex issue that requires a thorough study.

That thorough study sure is taking a long time.

The review of this issue and of other components of the tax system concerning motor vehicles is still going on. We will inform you of the results as soon as it is completed.

They have been looking at this proposal for a year and a half. I find it quite interesting that the Minister of finance has told me twice that this proposal has some merit and that it is worth exploring.

Indeed, on the basic principle that would give a tax deduction to workers who have to travel long distances to go to work and are forced to use their car, I think it is justifiable. This would help reduce unemployment in regions like ours and would promote economic activity.

When a forestry worker comes back to his family after two weeks on the job, he has a pay cheque, he can support his family, he can spend a little money to make sure that he has all the tools that he needs to go back to work. There is some economic activity there.

If the finance minister asks for detailed figures, he will find out that it is much better to help these people who have to drive far to go to work by giving them an appropriate tax deduction than to close the door on them, to entice them to stay at home, to push them into not going to work and becoming a burden on society, thus adding to the unemployment rate in a region that is already badly affected.

For all these good reasons, and because I think it would be worthwhile for these workers to persevere in pushing for this bill, I urge the government, the Liberal majority in this House, to consider passing this bill.

Recently we voted on a bill aimed at lightening the tax burden of mechanics, a bill introduced by the hon. member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, which was put to a vote in this House as a private member's bill and has gone on to the next stage. It has somewhat the same objective: to provide a proper tax deduction for the tools all mechanics must supply for their job.

This one deals with forestry workers, and in this case it is not a box of tools but a truck and all the equipment required for work in the bush. The two bills have the same underlying principle. I would like to get the same open-minded attitude from the Liberal majority and from all members of this House.

I am also taking advantage of the fact that we are in the prebudget consultation phase. A letter has come from the member heading the standing finance committee indicating that there is a prebudget consultation exercise to be carried out this year again, in order to ensure that the people of Canada may receive the best possible services from their government and the encouragement to accomplish things and take their place within society.

This is a concrete example on which a quick decision could be reached on behalf of people who are very hard-working, who do not have easy lives, who do not get to go home every night, who often have to do what we call down our way “two week runs”. They work away from home and have to sleep in camps where conditions are not always ideal, they have to put up with difficult conditions. Sometimes they pretty well have to sleep in their trucks.

I believe they deserve respect and deserve to be protected from personal bankruptcy. When people buy a pickup truck that can easily cost $25,000 if they want something decent, they do not buy them for their cool looks but because they are needed for getting to work. This is what they need to do their job properly.

I think our forestry workers deserve the recognition of the House. There are all kinds of tax deductions. In the case of businesses being allowed a deduction for season tickets for hockey or other professional sports, the deduction can be justified because it helps maintain jobs. A similar deduction costing a lot less would allow forestry workers to earn a living, to feel the dignity of being workers, to travel to their place of work, not to make fabulous profits but to earn enough income to keep on working. I think the government should consider doing this for these workers.

It is not a very complicated bill. Basically, it requires only a little sense of fairness on the part of those who would pass it. If it needs a little polishing in committee, we will be listening to see if some changes can be made, but it is obvious that the current legislation does not allow these needs to be met.

We made all the necessary representations to the appropriate officials and we came up against the fact that, under the current legislation, they cannot grant an adequate and satisfactory tax deduction that really takes into account the need for pick-up trucks and related material.

The legislators must take their responsibilities. Our forestry workers deserve our attention.

Over the last few years, we saw that we wanted workers to have jobs. They would like to turn seasonal workers into machines and ship them all over Canada to work. These workers are often willing to drive 200, 300, 400 or 500 kilometres a week just to get to their workplace.

I believe they deserve our attention and this tax benefit. It would only be fair and respectful of the work they do. This would also be an opportunity for rural communities to get enough extra income.

It is all very well to say that rural communities must look to new technologies, but the fact remains that primary natural resources are one of the important components of the economy both in Quebec and Canada. We must ensure proper management of these components. Forest use must be maximized.

Forestry workers have developed an expertise in a given area. If they are not allowed to go to work far from their home and to make a decent living, their expertise will be lost altogether, they will exit the labour market and will not find work in other sectors, thus becoming a burden for society. This is unacceptable.

Therefore I call on the members of this House to consider my proposals. At the end of today's debate, I will have the opportunity to rise again. I hope I will be able to say that I have the agreement of everybody in the House in order to move toward tangible results.

I hope we will be able to say to the finance minister “You have studied the matter, you say that you have not yet completed your review, but the stakeholders and the members of this House want a practical solution, that is giving forestry workers in Canada a proper tax rebate”. I believe forestry workers deserve nothing less.