Debates of Feb. 12th, 2001

Financial Consumer Agency Of Canada Act

[Peter Stoffer, NDP, Sackville—Musquodoboit Valley—Eastern Shore, NS]

Madam Speaker, the hon. member stated that we should rely on the banks to treat their customers properly. As he probably knows, the Scotiabank recently gave out $500 to $5,000 cheques to unsuspecting customers throughout the country. These elderly citizens thought it was either a gift or a donation from the bank, when in reality it was an unauthorized cash advance on their Visa cards.

When the Scotiabank does something like that and when the business editor, John MacLeod, of the Daily News mentions his outrage at this, how can we honestly trust the banks to do the right thing in all circumstances?

My question for the hon. member is, if the Scotiabank attempts to get away with something like that on unsuspecting customers, should there not be legislation in place to ensure that no bank or major financial institution can get away with so-called negative option billing or these so-called goodies out of customers who are unsuspecting?

[Ken Epp, Canadian Alliance, Elk Island, AB]

Madam Speaker, one of the dilemmas legislators face, of course, is to what degree they should pass legislation to protect people from their own negligence. If I get a cheque from someone, especially from a bank, I will read it to see what the fine print says. We all know good and well that there is no such thing as free money. That should be an alert right there. I would think that the primary responsibility is with the consumer in this case.

We do that in other areas. We cannot buy any other product without the company presenting it in such a way that it will keep our business.

If I were one of the people ripped off by the Scotiabank in that way—and I would use that characterization of it—I would just go to a different bank. I would tell the bank that I was done with it, that I wanted my money back and that I was going elsewhere. I know some people cannot do that because only one branch of the bank is close to them and the next one is far away, so they have limited options.

I would again say to the banks that if they do things like that they are only inviting legislators, like the House of Commons, to pass rules that restrict them in how they can advertise their business. They need to use their heads. The other thing open to consumers is a giant class action suit, after which the banks would never repeat it again.

[Pauline Picard, Bloc, Drummond, QC]

Madam Speaker, as this is my first speech in this new parliament, I want to congratulate you on your appointment to the Chair. I also wish you the best of luck.

I would like to take this opportunity to thank all my constituents and assure them that I will always be available and proud to represent them in parliament.

On February 7, the Minister of Finance reintroduced his bill to reform the financial services industry in Canada. Last spring's Bill C-38, which died on the order paper when the fall election was called, therefore became Bill C-8. Today, we are resuming second reading of the bill where we left it off. This new legislation, which will henceforth govern the financial services industry, will probably be passed in June at the latest.

Bill C-8 introduces a number of new provisions, including one on bank ownership. First, under the proposed legislation, a single shareholder will be able to own up to 20% of voting shares in one of the five major Canadian banks. The ceiling is now 10%.

Second, single shareholders will be able to control smaller banks with assets between $1 billion and $5 billion, such as the National Bank and the Laurentian Bank in Quebec.

Third, businesses and individuals will also be able to create their own banking institution.

Fourth, the new bill leaves the door open for major banks to resort to mergers, something they have been doing for a very long time. But the bill provides for public hearings at which the institutions concerned would be required to defend the merits of transactions for the common good.

I am pleased to speak to Bill C-8, an important bill introduced in this new parliament. However, although I am in agreement with the spirit of Bill C-8, I am surprised to see that the changes we have been told about do not appear in the body of the supposedly amended bill. These changes consist of guidelines. This is where we have a problem.

Everyone is aware of the Bloc Quebecois' interest in amending the legislation governing financial institutions. We contributed to the debate by submitting a brief, because we believe in the need for a legislative environment which helps to increase the capacity of our financial institutions to deal with global competition.

Foreign incursions into Canadian financial services markets are already an undeniable reality. In recent years, a number of foreign banks have established a presence in certain areas, such as electronic banking, credit cards, bank investment services and discount trading. In this era of globalization, they are competing with Canadian banks on their own turf.

As I have said, the Bloc Quebecois wholly subscribes to the spirit of the new legislation and to a number of its provisions. That said, certain problems we found during the last legislature are still present in the new bill. Even if we note a considerable change as far as the demands of the Bloc Quebecois and Mr. Landry are concerned, the four points are not incorporated into the bill but into the guidelines on the reclassification of former schedule 1 banks with assets of under $5 billion.

I would like to tell the hon. members what the applicable criteria are. These are: the safety and solidarity of the bank, direct or indirect employment, location of the bank's decision-making and administrative centre, consumer requirements, the bank's business and activities, and the bank's future prospects in a global context. These are the elements set out in the guidelines, but not in the bill itself, which concerns us somewhat.

Examination of the bill in its entirety also shows the frequency of loopholes such as “the minister may, if he sees fit” or “provisions of the act cease to apply if the minister should so decide”.

There is too much room for discretionary powers for a single man, namely the Minister of Finance. Wherever there are provisions on banks, insurance companies, trust companies, and the financial sector as a whole, the minister reserves the right to alone decide, from criteria known to him alone, whether an operation is unacceptable or not. He defines certain concepts, such as low-cost deposit accounts. It is unacceptable that this discretionary power has such sway, more even than the law itself.

In general terms, we would have preferred greater clarity in the decision making process and greater detail on certain concepts, such as low-cost deposits for the disadvantaged.

As regards consumer protection, the Minister of Finance remains vague and expresses more wish than real policy. The bill contains a number of provisions intended to protect and empower consumers of financial services. However, most of the groups heard in committee feel that these provisions are vague and will complicate the agency protection mechanisms.

Among others, there are provisions that intersect or overlap provisions of Quebec's consumer protection legislation. We oppose this. Consumer protection is exclusively a provincial matter.

However, protection specific to the banks can be a federal matter. But when we talk about consumer protection or the protection of personal information, this is a provincial matter, exclusively.

This bill talks of new intrusion by the federal government in areas of Quebec's jurisdiction. The Government of Quebec is, however, well covered by an array of laws. They include the consumer protection act, the personal information protection act, the insurance act, the trust companies act, the Quebec savings companies act and the credit and securities act.

All of these acts contain elements of consumer protection. How then will consumers know which legislation applies? Will the Quebec consumer protection act apply in a specific case? Quebecers might wonder when they look at the federal legislation and the laws we have in Quebec. How is one expected to know which act shall prevail? Will it be the Quebec consumer protection act or the new federal legislation? It is really not clear. Let us not forget that legislation respecting consumer protection is provincial legislation.

Consumer protection also concerns another group, namely the poor. The bill provides a definition of “low-fee retail deposit account”. Can anyone tell me what is meant by a “low-fee retail deposit account”?

According to the Minister of Finance, these so-called low-fee retail deposit accounts will ensure accessibility to financial services for low income people. Even though I got a Bachelor of Arts degree, I still cannot figure this one out.

No one knows who will be entitled to such an account, except the minister. No one knows if that account will be accessible everywhere, except the minister. Why? Because all these issues will be covered by regulations. One must really have confidence, or else ignore what is going on. We cannot understand, because the bill does not provide explanations.

The government is saying “Trust us. This will be covered in the regulations”.

This is all we have to go on for now, but it is not an assurance that consumers will be better protected under the new legislation.

When a branch closes and there is a reduction in services available to consumers, all the bill requires the bank to do is give six months' notice. Whether the bank is being closed in one, two, three or four months, it is still being closed. What good is this provision?

How can the minister say that such a weak provision ensures increased accessibility to financial services? The Minister of Finance is the only one who thinks so.

Let us imagine the case where a bank in a given region decides to close its doors because it is not doing enough business. We say that there is nothing in the bill guaranteeing the community that the bank must provide services. The bill says that the bank must give six months' notice before closing.

Is this good enough for the community served by this bank, when it was the community's savings that improved the bank's bottom line? One day, if business is down, the owners say: “We will restructure it, move it to a larger centre. You folks can find somewhere else to bank. We gave you the required notice and now we are closing”. This is unacceptable and it is not looking out for consumers.

When it comes to the real social and community role of banks, we would have liked the Minister of Finance to have paid attention to the proposals submitted by the Bloc Quebecois member for Hochelaga—Maisonneuve concerning reinvestment by banks in the community. I know that my colleague will be speaking to Bill C-8. We will have an opportunity to hear him.

In addition to the problems for consumers, there is a major problem in this bill with respect to ownership of major banks and financial institutions in Canada.

At this point, I should mention the bill's flexibility in allowing financial institutions to pursue their activities, and to deal with competition and globalization.

However there is a difference between the flexibility found in some aspects of the bill and the fact that some of our financial and banking institutions could be literally turned over to one investor who could gain total or near total control over these institutions or their management.

What we do not understand, and there lies the rub, is that in the case of the largest bank in Canada, the Royal Bank, one individual could own 20% of the shares? It used to be 10%. Now the percentage has climbed to 20%.

The reason given by the minister for not allowing more than 20% is that, in his view, it could be dangerous if one shareholder owned more than 20% because he could take control. One individual could take control of a major bank, a foreign investor could take control of the Royal Bank.

But in the case of the largest bank in Quebec, the National Bank, which is a medium size bank, one individual could own 65% of voting shares.

Why such a difference? Why such discrimination?

Why should it be more dangerous in this case? The minister says it cannot be raised to 30%, 40% or 50% for the largest bank, the Royal Bank, because it could be dangerous.

But in Quebec, the National Bank, which holds the business assets of Quebecers, could be bought by one individual who could own up to 65% of shares. In this case, it is no longer dangerous?

Why allow one individual so much control over the savings of Quebecers? This does not make any sense.

In some of the clauses I have read, they say it is not serious, that the National Bank has got to about $4 billion and will be governed by the rules for the major banks, where a shareholder could not hold more than 20% of voting shares.

Before this could happen, the Minister of Finance reserves the right to examine the entire situation and it could take up to three years before the bank could be allowed to come under the 20% rule.

During those three years, what is there to stop a foreigner from coming here and making use of the 65% rule to acquire all the power and then transferring the head office and all specialized jobs? The bank would be subject to foreign interests or a foreign business.

Why is this dangerous in one instance and not dangerous for the National Bank? We still wonder, why take the risk? Why two different measures, one for the big banks and one for the medium size ones? In this case, the risks are the same.

We have other criteria to add to this bill, and will do so via amendments.

Reference has been made to the guidelines. These are not part of the bill, but rather an aside, and the Minister of Finance reserves the right to apply them or not, as he sees fit. It is not reassuring to us that they are not an integral part of the bill.

The Minister of Finance of Quebec had sent a letter to the Minister of Finance of Canada calling for him to take these provisions into account, in order to reassure the consumers of Quebec and the people with savings. In his letter he wrote:

To ensure that a merger of the major banks is in the public interest, there is provision that such a merger will subject to a process of examination and that approval for the amalgamation will be subject to certain predetermined criteria. If this approach is necessary in the case of a bank merger, a similar approach is all the more justifiable when an individual is allowed to hold more than 20% of the voting shares of a low or moderately capitalized banks.

Public interest should be defined, in the present instance, according to the following criteria:

—The effect of the change on the activities of the banks, including available services.

—The effect of the change on employment at head office and in the branches and including professional jobs or those requiring particular expertise.

—The effect of the change on the regional economy and on the region's technological development.

These are the criteria we want to see and this is why we will be making amendments. I hope the government will support them.

[Gurmant Grewal, Canadian Alliance, Surrey Central, BC]

Madam Speaker, congratulations on your new appointment as Assistant Deputy Chairman of Committees of the Whole. I will be sharing my time with the hon. member for Richmond who is about to make his maiden speech.

I rise on behalf of the people of Surrey Central to participate in the debate on Bill C-8, an act to establish the financial consumer agency of Canada and to amend certain acts in relation to financial institutions.

I am proud to do this because the financial services sector is the largest sector in the British Columbia economy. Our largest banks employ about 26,000 people in British Columbia. Banks in Canada employ about a quarter million people directly and contribute approximately $80 million a year to charities in Canada and about $4.5 billion annually in taxes to our provincial and federal governments.

Despite the contributions that the banks and other financial institutions make, they are a sound foundation as the backbone of our economy. Our banks, trust companies, credit unions, mutual funds, insurance companies and others are very important to our economy.

The bill proposes to address the calls to modernize Canada's financial services industry. Canadian consumers of financial services have demanded a more competitive environment while our banks have been seeking approval to merge and to have more flexibility in the way they structure their operations.

The bill is an attempt to catch up to other countries that have made changes long ago to their financial services industry. The Liberal government has been dragging its feet on this matter for about seven years. This is too bad because our financial institutions must have the ability to make long term plans for the future. Once it is passed into law, we hope the bill will give our banks the opportunity they need to perform long term planning. I doubt that will happen because of the five year sunset clause in the bill.

My colleague from Prince George—Bulkley Valley has a great deal of experience and has been of great assistance to the official opposition working on our financial services policy group. The official opposition wrote a banking report in November 1998 entitled “Competition: Choice You Can Bank On”. The report forms the backbone of our financial services policy. It is a very good and detailed report.

The bill addresses some of the changes we on this side of the House have been pressing the government to enact. The official opposition has been carrying the flashlight to show the Liberals their darkness. After ridiculing our policies they have been stealing them from time to time. We encourage them to steal more of our policies, but unfortunately they do not get them right.

I understand that my colleague on the Canadian Alliance financial services policy group will be pursuing the government with amendments to the bill at committee stage. We hope the government will show some respect for what we propose.

We recognize that a strong financial services industry is essential to Canada's economic well-being. This means we need strong banks, insurance companies and other financial institutions. We need to create an environment for our financial institutions to flourish domestically and have the ability to take advantage of opportunities in the global economy.

Canada has one of the safest financial services systems in the world. We urge the government to ensure that these consumer benefits continue and not be changed or lost.

Outside the House critics of the bill are saying that in the past five years there have been many changes to the world financial system. The bill has been left behind. The bill used to be Bill C-38 which died on the order paper. It does not go far enough to bring our banks up to date with what is going on in the world.

International changes since 1996 are not reflected in the bill that is largely the same as what the Liberals introduced in 1996 but allowed to die on the order paper. They have been trying to pass the bill for far too long. It is out of date in many ways.

There are some who say that the bill is too little too late for our banks and that it will not help to strengthen the performance and competitiveness of our banks at home and abroad. They have already lost ground and they will not be able to make up those lost yards.

Other countries are well ahead of Canada. The United States has allowed its banks to merge with insurance companies. The Liberals insist on leaving it to their finance minister to decide what mergers can go ahead and which cannot.

By lowering the amount of money required to open a bank, we hope that the legislation will allow more banks to be set up in rural areas of Canada. The smaller the capital the more encouragement for institutions to jump into it..

The bill should enhance consumer choice by allowing insurance companies and mutual fund firms to use bank cheque clearing systems. If the banks take over the auto leasing and insurance industries they may hurt our economy since a significant amount of jobs are created by small businesses like car dealerships and independent insurance companies. The further entry of banks into the insurance and auto leasing markets should only be allowed if major auto financing and insurance companies have access to the Canadian Payments Association which they have been requesting. Banks must not have a competitive advantage over auto leasing and insurance companies. There must be a level playing field for all competitors within a given market.

The Canadian Alliance supports the creation of a holding company structure where banks will be able to remove some of their non-banking operations, such as credit card businesses from bank regulations, by establishing separately regulated holding companies. This new structure would allow our banks to compete more effectively against foreign non-bank competitors.

We support increased access to the payments system so that life insurance companies, money market mutual funds and securities dealers will be allowed access to increases in consumer choice.

We support expanding the role of credit unions. I can say that because for about three years, before becoming a member of parliament, I was a director of the second largest credit union in Canada. I saw the environment from the inside. I know that the credit unions are not getting the same support as the financial institutions. They are not only consumer and community oriented, but they also have a good network of branches that help people at the community level.

We are disappointed that this measure is not included in Bill C-8 despite the recommendation in the MacKay report to allow for it. We believe that the government has failed consumers since this measure was seen to be a key point in increasing competition and benefiting consumers of retail banking, that is by the credit unions.

We are concerned about the measures in the bill that would regulate access to financial services. We are concerned about regulating branch closures. This kind of initiative by the Liberals is unnecessary red tape. The banking industry already considers it good business practice to properly justify any bank closures and to give fair warning to the communities or their customers.

The bill also proposes a financial consumer agency responsible to the finance minister. These bureaucratic positions would be filled with Liberal appointments, like Mr. Lou Sekora, just as many other failed Liberal candidates have been given patronage plum jobs by the Liberals. We would support an independent ombudsman selected by the House with penalty enforcement powers and the ability to make binding directives when necessary.

In conclusion, we hope the Liberals will pay considerable attention and take our amendments seriously. We hope they will listen to the witnesses who will be appearing before the committee. We will support the bill with amendments, particularly in the areas of credit unions establishing co-operatively held banks; the tremendous power given to the Minister of Finance; the bureaucracy created by the new commissioner of the FCAC; and the regulation that demands banks to provide money losing personal accounts.

[Joe Peschisolido, Canadian Alliance, Richmond, BC]

Madam Speaker, I take this opportunity to thank the voters and constituents of Richmond, which is I think the best place to live in the lower mainland of British Columbia, for giving me this opportunity to represent them and to be here today to talk about this technical but very important piece of legislation.

It is interesting that my maiden speech will be a rather technical one. However, I think it is important to say, as my friend from Surrey Central has mentioned, that the Canadian Alliance supports the general thrust of the legislation. We hope to offer constructive amendments to it at committee stage.

I will take this opportunity to go point by point in a little bit more detail than my colleague and talk about the position of the Liberal government and how we will be helpful in supporting where we believe support is necessary, and opposing in a gentler constructive way where we believe that opposition is necessary.

The member for Surrey Central talked about the Canadian financial services ombudsman. We all know that this agency would be responsible to the finance minister. It would be designed for all financial institutions. The Canadian Alliance believes that it will simply be another bureaucracy with no powers and filled with Liberal appointments. What we should have, and what the Canadian Alliance will follow through on at committee stage, is an independent ombudsman selected by the House with our colleagues, with the powers of penalty enforcement and also with the power to make binding directives to the banks.

I will also talk about the holding company structure. The Canadian Alliance does support this new structure because it would allow Canada's banks to more effectively compete against foreign non-bank competitors and other alternative financial institutions.

We have many financial institutions in Richmond. We have credit unions, the TD Bank and the Bank of Montreal. I was actually discussing this proposal with the bank manager of the TD Bank. We are in complete agreement with the bill on this and we will work very closely with the government to pass the legislation.

With regard to expanding the credit union role, I reiterate that we are disappointed that the government did not take the MacKay report into consideration when dealing with this point. The Canadian Alliance supports the move to restrict widely held ownership to 20% because we think it will strengthen the global position of Canada's domestic banks.

To go back to Richmond riding again, we have the TD Bank and the Bank of Montreal. We have a wonderful opportunity to move in not only south of the border, where we have many integrations occurring in the financial services, but if we are able to pass the legislation, we can be world players in the international field, particularly in the Asian market.

On the issue of allowing smaller banks, we are talking about the minimum capital requirements to establish a new bank, trust company or insurance company. We support this initiative because it would provide more consumer choice, which basically is what this is all about.

We can talk about percentages and holding requirements. Even though we are in opposition we believe we are a constructive force. Ultimately we are trying to give the greatest choice to consumers at the lowest possible price. The greater the competition, the greater will be the incentive to have lower costs on service charges and on a variety of issues.

With regard to restrictions on auto leasing and insurance, the Canadian Alliance believes that the auto leasing and insurance markets are currently very vibrant and competitive industries. The banks must continue to be restricted from offering auto leasing and insurance products directly through their branches to avoid unduly concentrating financial power in their hands. We are talking about competition where we do not want a monolithic entity stifling competition and where we can have a variety of players in the field such as local brokers.

I have a variety of local insurance agents in Richmond. They work very hard to give the best possible price and products to the people of Richmond. I am sure we have hard working brokers across the country. I take this opportunity on behalf of the Canadian Alliance to congratulate the hard working men and women who work within these industries.

With regard to regulating access, my friend talked about the new regulations that would set lower ID requirements for opening accounts and proof of employment would not be a requirement. This is excessive red tape. It is an issue that is not being properly addressed. Let us allow the industry to address it. We believe it is an area that the government should not be delving into. Let us allow the forces at play to deal with it.

We applaud the government side for finally dealing with this issue. As my friend from Surrey Central mentioned, we must have a very strong and vibrant financial service so that our whole economy can function properly. We are a bit disappointed and saddened that the seven year process has occurred with a lot of political manoeuvring rather than sound business economic decision making. However, I am sure that in committee stage we will be able to work very closely with the government to make sure we come up with a top notch bill.

[Dennis Mills, Liberal, Toronto—Danforth, ON]

Madam Speaker, I congratulate the member for Richmond on his maiden speech in the House of Commons. Let me be a bit partial toward this member for just a brief moment. We have an alumnus past together at Saint Michael's in Toronto. I celebrate that part of his life. It is just too bad that somehow he ended up with the Canadian Alliance. He had a strong tradition of real liberal values and I can only hope that his upbringing and his education will be a moderating influence on the Canadian Alliance.

The member represents the riding of Richmond but he also has deep roots in the greater Toronto area. I humbly point out to the member that it is important that financial institutions be reminded constantly that we on all sides of the House are attentive to the treatment of and access to capital for small businesses.

I was hoping that perhaps the member would stand in his newly minted role as the member for Richmond and commit a large part of his time to making sure that our financial institutions are very vigilant in looking after small businessmen and women and their access to capital activities.

[Joe Peschisolido, Canadian Alliance, Richmond, BC]

Madam Speaker, let me thank my friend from Toronto—Danforth for those very kind words. One thing my friend did not mention is that we may have gone to the same high school but my friend may have gone a few years earlier than I did.

There is a note saying that the youth looks at things in a very passionate and emotional way and then they simply grow up. In response to my friend's questions on my meanderings and my moving over on the political spectrum, perhaps I simply grew up and looked at things the way they ought to be looked at.

I share my friend's concerns about the importance of providing capital to small business. We have talked about big business. The Prime Minister is off to China trying to get contracts for big companies. That is a legitimate thing to do, if they are actually able to get them. However, no reputable economic thinker disputes the importance of small business to the strength of the economy. If we cannot have access in a fast and efficient way at rates which are competitive, we are not going to do things in a good way.

Let me simply thank my friend across the aisle for his comments and say that we will work together. I am sure all of my colleagues in the Canadian Alliance would agree that we need to have a strong financial services sector with banks and financial institutions that offer loans to the small businessman and woman.

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, I am glad to have the opportunity to join the debate on Bill C-8. As has been pointed out by previous speakers, the bill is a reincarnation of Bill C-38 which died on the order paper last fall at second reading.

We can tell by the amount of debate in the House on this bill already today that there is great interest among all Canadians to see reform of our financial institutions and the whole financial sector. This stems from a growing feeling on the part of Canadians that our current financial institutions are failing to meet the needs of the average Canadian.

There is a growing sense that our chartered banks, which most people grew up with as symbols of stability, that they were something to be proud of and which were given charters for specific reasons, are failing to meet their mandates under the terms of which they were given their charter.

We all know that the five chartered banks have an exclusive monopoly on certain financial transactions, for instance, the right to process credit charges. These profitable transactions are huge. This is a sector that they have been given exclusive right to and the trade-off was that they would meet the needs of the average Canadian community and the average Canadian citizen for their basic financial services.

I can begin by saying that in the riding of Winnipeg Centre that has been anything but the case. In fact, there has been a flight of capital from the inner cities across the country, Winnipeg Centre being no exception. There is almost a seemingly vote of non-confidence in our communities as people watch these institutions fold up their tents, leave and not provide the basic services that they were charged with the responsibility to offer. In fact, they are doing anything but that. As was pointed out by the previous speaker, small businesses are not given a loan unless they can prove that they do not need it.

More and more of the basic financial services, such as having a neighbourhood branch within a reasonable distance for senior citizens or people of low income, are getting to be a thing of the past. These services are being taken over by ATMs or by large corporate branches that may be in the centre of the financial district, but they are not in the communities and they are not in the small towns in and around rural Manitoba.

There has been a growing resentment over this trend of bank closures. This came to light a couple of years ago when the banks were anxious to merge to form even larger institutions. Many Canadians mobilized at that time, specifically to stop the bank mergers. However, other realities came to the forefront. There has been a growing frustration with not only the lack of services in the communities. It forced Canadians to have a really serious hard look at what our major financial institutions were or were not really doing for us.

It has even mobilized people who own shares in the various banks. There is a growing shareholder movement among people who own shares in the five chartered banks. I had the privilege of going to two of the national shareholders' meetings recently. I never thought in my wildest dreams that I would be going to a shareholders' meeting of the Royal Bank or the Bank of Montreal. I do not own shares in either of those institutions, so I had to borrow some proxy votes in order to crash the gates and get in.

Our point was that at a time when the banks seem to be operating on their own and without any input from the Canadian people who cause them to be, we needed to seize the issue somehow and put a little bit of democracy back into the corporate system. In other words, if we were unable through our elected institutions to coerce the banks into doing their job of servicing Canadians, perhaps if we mobilized through a shareholders' rights movement we could coerce the banks into doing the job that they were hired to do or they were given the exclusive right of some financial transactions in exchange for.

It was rather interesting. I do not know, Madam Speaker, if you have ever been to a shareholders' meeting of one of the major chartered banks. Probably many of the people in the room have. I certainly had not. I was very surprised that as many as 1,400 people crammed the hall in a major hotel in downtown Toronto to attend the meeting. I thought it would be like other meetings of its type that I had been to, like union meetings where people would move a motion, have it seconded, debate it and the motion would either pass or fail based on its merits.

In actual fact, nobody there seemed interested in talking about very much except for the actual returns of that quarter of that actual fiscal year that was being reported on. We went there with a number of people who moved real motions that we thought would benefit the average Canadian. There were only nine resolutions put forward in the whole meeting. We moved all nine and I seconded all nine.

One of the resolutions was to limit the salary of the CEO of the bank to ten times that of the average employee, which he thought was kind of an innovative move. It was quite a fair resolution too when one thinks about it. If the average employee makes $40,000 or $50,000 a year working for the banks, the CEO would then get 10 times that or $500,000 or $600,000 a year. We would think that is pretty fair compensation.

That motion did not pass. We seconded it and argued it aggressively as to why that would be more fair. We even pointed out that the average CEO of a Japanese corporation makes 10 to 13 times that of the average worker of the enterprise over which they govern. In the case of the bank presidents of the Royal Bank and the Bank of Montreal that figure is 80, or 90 or 120 times the earnings of the average employee. Those are wildly and grossly inflated salaries to reward these bank presidents for doing what? For cutting off access to services for average Canadians. This seemed to be their reward.

Granted there were record profits involved and quarter after quarter they were making more money, but all the time they were raising service charges, closing bank branches and denying basic services like loans to small businesses. No wonder they were making a profit and rewarding each other very handsomely.

When we looked at that structure, no wonder they were voting each other big raises. They all seemed to sit on each other's boards of directors. I learned a lot when I crashed that shareholders' meeting. As a socialist and a trade unionist, attending a shareholders' meeting like that was a real education.

We learned that one of the boards of directors of the bank, I believe the Royal Bank, George Cohon, the CEO of McDonald's, sits on 50 other boards of directors. Each one of those boards meets about 10 times a year. That is 500 board meetings a year that presumably one would have to attend, but nobody can do that. The only board meeting one really has to go to is the board meeting when they vote on a raise for the board of directors. Then the other members of that board will come to that board of directors meeting and vote for a massive raise.

It becomes an incestuous little circle of people who vote each other massive pay increases. That is what motivated us to try to interfere with that whole circular process and cap it off. Whatever rate of pay one is paying one's employees, one can pay oneself 10 times that, but that is enough. Frankly, we do not believe that banks deserve to be rewarded for cutting off access of Canadians to basic banking services. That is one of the shortcomings that we pointed out.

Another motion that we moved demanded gender parity on the board of directors; 50:50, female to male. We came close on that. It is really ironic that the person that moved the motion was a famous Bloc separatist named Yves Michaud. He is the person whose motions I was seconding. The results of that vote were exactly the same result as in the last Quebec referendum, 49.6 to 50.4. There is something about that number that Yves Michaud seems to generate in people. I do not know if it is because he moved it. Perhaps I should have moved the motion myself. We thought that was a good idea. There was a great deal of interest.

One of the other motions that we moved was the very thing that I pointed out with the increasing of CEOs wages, salaries and compensation. Due to the fact that they all sit on each other's boards of directors, we also moved a motion that would limit the number of boards one could sit on to 10. If they all want to sit on each other's boards, let us make it a reasonable number. In this way we hoped to somewhat democratize the corporate structure and give the people who actually rely on the bank's services to some say on what the banks do or do not do.

In my riding of Winnipeg Centre, we have seen bank branches close in an almost epidemic way. The same is true for my colleague from the riding of Winnipeg North Centre. The banks are shutting down branches like there is no tomorrow in the hopes to increase their profits even more. The trade-off was supposed to be that we would give them the exclusive right to certain financial transactions in exchange for reliable adequate service and even some accountability to the community at large.

For instance, in the United States there is a community bank investments act which mandates that banks reinvest a certain amount of their profit into the community that they serve, even if it is not the most profitable venture, or a break even venture or marginal venture. If it is something of community interest, a non-profit group that wants to get started but is short of capital, the banks would be mandated by the community investment act to invest in at least some of these things to move the community forward for its own benefit.

Bill C-8 does one thing. It helps the credit union movement. I should say something positive about that. Many of those people are so disillusioned with the service, or lack of service, that they have been getting from the chartered banks. They have been gravitating toward the credit unions in order to get access to the financial service that every family and small business need.

One of the positive aspects of Bill C-8 is that it will finally allow a national structure for the credit unions, a credit union central, so that they would be recognized as an entity that way. We think that is a very positive step. We see it province to province. We have a Manitoba credit union central. Now there can be a national structure along those lines.

However, the shortcomings far outweigh those small benefits. Canadians are looking to the banks for support for the most basic of services and are being denied them. In a time when the banks are showing record profits, one would think that there would be some feeling that they should be able to enhance their service to Canadians instead of continually reducing them in spite of record profits quarter after quarter.

Our position is that the banks have done nothing to deserve being rewarded with the additional freedoms they would enjoy under Bill C-8. We believe Bill C-8 would, in a small way, enable the banks to achieve what they failed to achieve recently under the bank mergers. It almost institutionalizes the concept that banks will eventually merge, in that it specifically talks about that eventuality and the possibility it would be dealt with in parliament.

Instead of being dealt with on a random ad hoc basis, it more or less contemplates that mergers sooner or later will be a fait accompli. Canadians recoiled at the whole bank merger idea. The society of seniors spoke out vehemently that they were concerned that if banks were allowed to merge further and get even bigger, their interest in serving the small homeowners or small businesses would be even less.

We all know that much of the profit the banks are making now is really from their offshore and corporate customers, not from the average citizen and the small mortgages that homeowners might enjoy.

Another thing that comes to mind, and I wish we had thought of it at the shareholders' meetings of the banks, is to protest the fact that when the Minister of Finance outlined the recent round of tax cuts, the announcement that the corporate tax rate will go down from 17% to 16% slipped by without very much notice.

I have heard different figures as to what effect this will have on the chartered banks. One figure that I heard is that as much as $75 million a year will be kept by the banks as a result of that one percentage point change in the corporate tax structure.

I would ask the House of Commons and all Canadians what the chartered banks have done for us recently to deserve a reward like this, a kickback, if we will, of up to $75 million per year that they will now be able to keep above and beyond the record profits that they enjoy quarter after quarter?

One might sense that I am quite critical of our financial institutions. We were hopeful that Bill C-8 would come down hard and advocate on behalf of Canadians. We expected the Canadian government to be champions of Canadians and not, frankly, to cater to the interests of financial institutions and give them the enabling legislation they might need to go through with what they failed to do last year.

Many seniors have visited me in my riding to tell me how disappointed they were that their local bank branch was closing, and they wanted to know why. When they appeal to the banks they get a long, convoluted restructuring message on how the banks will be better able to serve their customers through e-commerce and ATMs, and that now people can bank on the Internet, switch on their home PCs and have all those banking services available to them.

That is not much consolation for a low income senior citizen on a fixed income. The seniors in my riding resent losing what they counted on as being part of their community and part of their neighbourhood. As I said in my opening remarks, it really looks like a vote of non-confidence in a neighbourhood when the local bank branch does not see fit to stick around because it does not sense enough economic activity to warrant keeping its doors open. What does a boarded up bank say about one's neighbourhood and about the viability of the town, the community or the inner city neighbourhood that one lives in?

Some people have called the attitude of the banks toward ordinary Canadians abusive and unaccountable to the community. What we had hoped to see in a bill dealing with financial institutions was a return to that accountability.

This reminds me of a parliamentary junket to Botswana that I was invited on. The outgoing president of Botswana, Masire, was one of those African leaders who really was committed to his community. It was one of those countries that was not corrupt and that worked hard in the post-war era to try to build a nation.

Masire had chartered banks in his country with the exact terms and conditions that we put on ours. That is what he said in a meeting with the minister, which we attended. However, the banks disappointed him and failed to meet their commitments in such a way that he said to hell with them. He said that he was going to invite the whole world to come and bank in Botswana because those to whom he gave that exclusive privilege had failed the country.

I am not saying we are at that point. I am not saying it is quite that drastic for us yet, but there is a growing feeling that we are giving chartered banks the exclusive right to some of the most profitable transactions. The processing of credit cards is one example. Every time a credit card is used the processing fee must be done by one of the chartered banks. If we give banks that exclusive right, we want something in return.

We do not want to see boarded up banks in our communities. We want a commitment to and reinvestment in our communities. Banks should take some of their record profits and do more than just donate to the Winnipeg Ballet or to some other arts program to improve their image. If they gave one-tenth of what they spend on TV advertising, which is a huge campaign to try to improve their image, people might feel compensated for some of what they have lost in service.

There are huge gaps in banking law. There is a real need to address the overall picture and the way Canadians view the banks, whether in terms of providing services, the insurance aspect of things, what the banks have been trying to grab, or all of their financial activities. We need to put the reins on them in some respects.

The bill, thankfully, stops short of giving them all they have asked for in terms of being a single window shopping centre for all financial transactions, whether auto insurance, life insurance or whatever. We have not gone that far.

We want to see that banks with some accountability to the community and not just to their shareholders. If they are to be motivated by profit alone and by no secondary objectives whatsoever, why are we giving them exclusive monopoly on certain transactions?

I predict there will be a growing shareholders rights movement and that more people will be buying 100 shares of one of the banks so that they can crash the shareholders meetings, hijack the meetings and get some of the amendments we put forward through.

If Canadians were polled, they would be horrified that some people make $8 million a year to run one of the chartered banks. The basic salary might only be $1.5 million a year, but when stock options and shares are added up, they are making $8 million to $10 million a year for not really doing their job. Why reward people for failing to do the job they were asked to do?

[Sarkis Assadourian, Liberal, Brampton Centre, ON]

Madam Speaker, I have two questions for the hon. member from the NDP. Could he tell the House what the return is on capital investment of banks? I want to know how much money they invest in total and how much they get in return. If he knows the answer to that, I would appreciate hearing from him.

Second, how much of the profits banks make came from service charges to consumers last year?

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, I was a proxy shareholder at the shareholders' meeting. I do not have access to all the inside information that the banks might circulate on what their total revenue is or on the amount that they spend in the community. What I am sharing with the House is the frustration that Canadians feel over what they see to be a lack of services to the community and a lack of reinvestment in the community.

I can give graphic case by case examples of small businesses that could expand in my riding if it were not for lack of access to venture capital. They could expand and grow and hire more people if they had better accessibility to capital. The banks are turning them down. The feeling is that if they cannot prove they do not need the money, the banks will not give it to them. In other words, if they need it they will not get it. If they do not need it, the banks will give them all they want.

I do not know if the intention of the member's questions is to act as some corporate shill for the banks. I do not think the banks need his help to defend themselves. They spend millions and millions every year running ads on TV trying to paint themselves as warm, fuzzy parts of the community.

Both the member who asked the question and I know that nothing could be further from the truth. Most of their profits are generated from their corporate and offshore accounts. I attended two shareholder meetings and learned that over 50% of their revenue was actually from their offshore activity.

There is very little money to be made in handling either ma and pa's bank account or the $50,000 mortgage for some newlywed in my riding. There is no money in that, and they would just as soon get out of it and pass it over to the credit unions.

If that is their attitude, why are they being rewarded, every time we turn around, with exclusive rights to the financial transactions I mentioned or with another drop in the corporate tax rate?

The Canadian Taxpayers Federation is always talking about tax freedom day. On June 26 Canadians enjoy tax freedom day; they actually get to keep their money. There used to be a corporate tax freedom day, but it started getting in the way of New Year's eve. The parties started to blend together, so corporate tax freedom day was stopped because they were getting embarrassed. The New Year's eve party and the corporate tax freedom party would merge into one event.

[Judy Wasylycia-Leis, NDP, Winnipeg North Centre, MB]

Madam Speaker, the member for Winnipeg Centre raised a very important issue that must be addressed by the House as we pursue Bill C-8. The issue has been invisible to date, and I am surprised that more members are not speaking up about the impact of bank closures on their communities.

I am talking about rural communities, isolated northern communities, inner city older neighbourhoods, and whole communities that have been abandoned by the big banks and that do not seem to be addressed in the legislation.

The member for Winnipeg Centre and I have experienced numerous bank branch closures over the last several years. Low income residents, senior citizens and small businesses are not able to get the services they need and deserve.

Would the hon. member have any suggestions for the government to improve the legislation? Would he support the idea of a moratorium on bank branch closures until such time as we can put in place proper mechanisms for addressing profitability and community viability? Would he agree with the idea enunciated by our colleague from Regina—Qu'Appelle about some form of obligation on the part of the banks to reinvest back into the communities that gave them their position of profitability in the first place?

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, the hon. member for Winnipeg North Centre asked me the number of bank closures in my riding in the past seven years. I can give her the number since I was elected in 1997. Twelve branches have closed in my riding alone during that period. It is an epidemic. It is an absolute flight of capital from the inner city, or at least the presence of bank branches.

The hon. member also asked what we would have liked to have seen in the legislation that might have mandated some accountability or some reinvestment in the community from the banks that have been allowed to prosper under their exclusive privileges. There were repeated calls at the committee stage throughout the development of Bill C-38 to put it in language similar to the community reinvestment act of the United States.

The United States is the ultimate free market country. Nobody is saying that the community reinvestment act somehow gets in the way of the free movement of capital. It is a sensible restriction on banks. Yes, they can make profits and yes, they can prosper and flourish, but some designated amount must be reinvested into the community that gave them the profits they enjoy.

It would not have been difficult to do this. It is a huge shortcoming in the bill and a missed opportunity for us to be advocates and champions for Canadians instead of being champions for the big banks.

I use the term corporate shill. Are we shilling for the banks with this legislation? Is that what we are really doing, or are we standing up on our hind legs and advocating on behalf of Canadians?

[Sarkis Assadourian, Liberal, Brampton Centre, ON]

Madam Speaker, earlier I asked the hon. member for Winnipeg Centre two questions and did not receive any answers. I hope he takes a few hours tonight or tomorrow before he comes to the House to research the questions in order to give me the appropriate answers, because I am looking for them. They are very valid and important questions for the taxpayers of the country.

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, it was kind of a non-question. I did take the hon. member's first questions very seriously but could not answer them with specific numbers. I do not think anyone in the House of Commons today could.

What we know is what Canadians are telling us. They sense that the profits are not going into the community, that the profits are sometimes leaving the country.

I have heard the argument on the other side that we all enjoy the benefits when the banks make money because we are all shareholders in the banks and that even if we are not personally shareholders, maybe the pension plan that we belong to with our union invests in bank stock, so we want them to flourish and prosper.

However, we also want something to go directly into the community. That is not an unreasonable request. When the banks are enjoying record profits quarter after quarter and do nothing about their service charges and the increase in fees, with an increase of up to 150% in recent years, it is no wonder they are making a profit. It is not unlike the Liberal government's EI system, whereby if government takes in more money than it gives out obviously there will be some left over. We want a tangible return to Canadians, a real hard return, one that benefits the community and not just the shareholders.

[Suzanne Tremblay, Bloc, Rimouski-Neigette-Et-La Mitis, QC]

Madam Speaker, I am pleased to take part in the debate on Bill C-8, an act to establish the Financial Consumer Agency of Canada and to amend certain acts in relation to financial institutions.

This bill replaces Bill C-38, which as they say died on the Order Paper when parliament was dissolved last October, after the Prime Minister decided to call an early election, having not yet completed four years of his mandate.

To begin with, this is essentially the same bill. Bills C-38 and C-8 are twins. But they are not identical because, in addition to a few minor amendments to ensure a closer match between the English and French texts, there is a major change with respect to the demands made by the Bloc Quebecois and by Bernard Landry, Minister of State for the Economy and Finance and Deputy Premier of Quebec, a change which would ultimately make the bill more acceptable by adding amendments anyway.

I was saying that the federal government decided to respond in part to the demands and expectations expressed by minister Landry by incorporating in its bill four points the Government of Quebec felt were important. However, these points were incorporated not in the bill itself, but in the guidelines on the reclassification of the banks listed in schedule 1 whose equity capital is under $5 billion.

The guidelines that accompanied the release issued on the day the Minister of Finance introduced his bill, clearly stated that, and I quote:

Any transaction involving a recategorization will be considered on its own merits, and should demonstrate that it would foster opportunities for the bank to grow and better serve the customers of the bank.

In considering whether a proposed transaction involving a recategorization is in the public interest, the Minister shall take into account all matters that the Minister considers relevant, including:

safety and soundness of the bank;

direct and indirect employment;

the location of the mind and management of the bank;

needs of consumers;

businesses and operations of the bank;

and prospects for the bank in the context of the global marketplace.

However, since these elements were not included in the act, they could be changed by the minister who could, for example, yield to the pressures of powerful international lobbies.

That being said, I must say without any hesitation that Bill C-8 raises many questions in my mind. When I think about what I have seen and observed with this government over the past eight years, I am concerned. I am concerned by, among other things, the government's arrogance, its contempt for democracy, its inability to fulfil its own promises and by the ease with which it yields to the pressures of the well-to-do and crushes the poor. I could go on and on, because there are so many reasons to be concerned about this government.

Let us take a look at a few things that are scary in this bill.

Bill C-8 gives full power to the federal Minister of Finance to decide, alone, the future of Quebec banks.

With Bill C-8, the Minister of Finance will be able to decide alone, at his own discretion, the future of Quebec banks. I find it truly unacceptable that this discretionary power is as strong as if not stronger than the act itself.

The Bloc Quebecois is concerned that a single shareholder could, with the agreement of the Minister of Finance, own 65% of the shares of the National Bank, the number one bank in Quebec. There is no need for the Minister of Finance to authorize this excessive control to ensure the flexibility of the National Bank. How is it that a shareholder owning 65% of a bank will give it more flexibility than 65 shareholders owning 1% each?

We need legislative guarantees against any negative impact these new ownership rules might have on employment, for example, on consumer services, on small business services, on decision centres and, most of all, on Montreal's role as a hub in the area of international finance. The stakes are just too high for Quebec to rely on only one person, the federal Minister of Finance, especially since Bill C-8 offers no real legislative guarantees. As I said earlier, the bill does nothing more than list some elements to consider that do not go far enough and that are under the sole control of the Minister of Finance.

Even worse, it seems to me that the finance minister's bill is full of holes which should be cause for concern to any person of goodwill. Why must the government write such thick bills if it does not seek clarity? How will this government be able to judge the clarity of others if it is incapable of seeing its own lack of clarity? One factor which contributes to clarity is precision. See for yourselves. On page 55 of the bill, clause 385 sets out the public holding requirement for banks. However, we learn a little further on, in clause 388, and I quote:

On application by a bank, the Minister may, if the Minister considers it appropriate to do so, by order exempt the bank from the requirements of section 385, subject to any terms and conditions that the Minister considers appropriate.

As well we see that the provisions of the act cease to apply if the minister so decides. In other words, this is a bill with flexible parameters, one that will allow Ottawa and the Minister of Finance to decide unilaterally on the future of the National Bank.

It is not obvious that the federal Minister of Finance's bill as presented will ensure healthy competition in the national market. Yet this competition is more important to future economic development than striving to be bigger internationally.

But the Minister of Finance has decided to make legislation in favour of the big banks, even if by so doing he has to sell out the banks of Quebec, including the National Bank, the one known as the bank of small and medium size business in Quebec.

When I think of the way certain individuals, including the Minister of Intergovernmental Affairs and member for Saint-Laurent, want to see Quebec suffer, I tell myself this is a really powerful weapon in the hands of the federal Minister of Finance, if ever the federal government decides to act.

In this case I say to my fellow Quebecers, here is another really good reason, just one more, to create our own country, so that we can make our own decisions on what we want to do with our banks.

As regards consumer protection, the Minister of Finance remains vague and expresses more wish than real policy.

Bill C-8 will establish the financial consumer agency whose purpose, according to the finance minister, will be to protect consumers.

The Bloc Quebecois is and has always been a protector of human rights and citizens as evidenced by the debate held in this House on Bill C-54 that dealt with the protection of personal information and died on the order paper in 1997 to be reintroduced as Bill C-6 and given royal assent on April 13, 2000.

I want to remind the House that Quebec already has several laws protecting consumers. For instance, there are the consumer protection act, the privacy act, as well as all the legislation on insurance companies, trust companies, savings and credit unions and securities.

This new agency will only create duplication in regulations, given all the measures that have already been taken by the Government of Quebec in this area which, need I remind the House, is under provincial and not federal jurisdiction.

The finance minister takes the credit for including in Bill C-8 a measure, the low-fee retail deposit account, as described in section 448.2, that would provide low income people greater access to financial services.

With regard to this famous low-fee retail deposit account, nobody except the minister knows exactly what it is all about. Nobody knows what are the prescribed characteristics mentioned in this clause and which would entitle an individual to a low-fee retail deposit account. Nobody except the minister of course knows whether such an account will be available everywhere, in every bank in Canada and Quebec.

How is it that, as we are talking, the minister is the only one who knows the answer to all these questions? It is very simple. The minister is the only one who knows, because all these issues will be defined in the regulations. As we are having this debate in the House, we do not have a clue about what will be in the regulations.

True enough, if the regulations had been made an appendix to the bill, it would have increased the thickness of an already voluminous piece of legislation. For the time being, all we have to go by is the minister's word.

Once bitten, twice shy, however. Members of this government have made so many promises during three election campaigns, in 1993, 1997 and 2000, without keeping their promises or being true to their word, that I must say the fine words from the Canadian Minister of Finance are not enough to be able to categorically state that consumers will be better protected under this new law.

I also question what is in the bill regarding branch closure; I wonder what will happen with the reduction in services available to consumers. The only measure provided by Bill C-8 is that a bank must give a four month notice before closing a branch.

Before, people learned about the closure the very morning their branch was to close. With the finance minister's bill, they will know about it four months ahead of time.

With this bill, the government can do precious little to prevent, through legislation or coercion, the anticipated closure of a branch. With a clause that is so unrestrictive, how can one claim, like the finance minister does, that this bill will improve access to financial services? The minister is the only one who can have this kind conviction and optimism.

Bill C-8 does not provide any concrete measure to ensure greater access to financial services for the poor. That would have been a step in the right direction. The minister should know by now that there is a real problem there. He could have made use of the bill introduced by my colleague and friend, the hon. member for Hochelaga—Maisonneuve, in the second session of the 36th parliament. The bill was entitled an act to amend the Bank Act and the Statistics Act (equity in community reinvestment). Its main goal was to ensure that certain branches of banks take measures to facilitate access to credit for persons who have a residence or a place of business in a federal electoral district in which the branches are located.

Bill C-8 does not give any guarantee that the minister will take into consideration the specificity of the financial system in Quebec. Madam Speaker, if you and I could have a conversation on the subject, I am almost convinced that you would tell me “The hon. member is well aware of the fact that the minister is himself from Quebec, and he takes Quebecers' interests to heart”. I would regretfully have to tell you that the minister is indeed the member for Lasalle—Émard, but that he ignores or purports to ignore that Quebec is a people whose financial system has its own specificities, and that the minister in no way takes that into account in Bill C-8.

I might add that we would have this conversation if you did not hold your present position. I know that you now have to be of the utmost neutrality. But if you were a backbencher, as I am, we could have had this little chat.

My colleagues, the members for St. Hyacinthe—Bagot and Drummond, who are finance critic and assistant finance critic, respectively, will propose amendments to Bill C-8 on behalf of the Bloc Quebecois to counter the inequity towards Quebec's major banks. I hope the extended Liberal caucus from Quebec will keep its promise of standing up in Ottawa for Quebecers. To this day, this caucus has given its support to the government each time it has introduced bills going against promises made during the recent campaign. Will I be forced, once more, to conclude that the population has been misled? I am waiting for proof and it is much too long coming.

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Madam Speaker, first, I want to congratulate my colleague from Rimouski-Neigette-et-la Mitis for her eloquent speech. We can see that she has really studied what she was talking about and has a very good grasp of it. You are missing a fine discussion with her, I am sure.

However, we cannot talk about banks and the Bank Act without talking about a distinguished Quebecer who tackled the issue in the last few years. The hon. members know that I am talking about Yves Michaud, a former Quebec delegate to Paris and who, instead of taking a very comfortable and well-deserved retirement, decided instead, in spite of his age, to put all his energy, all his talent and all his eloquence—and has plenty of all that—at the service of not only the consumers, but also of small equity investors. He wanted to make the operations and management of the banks and probably the Bank Act itself more democratic and more beneficial to those who put their trust in this very important system in our social and economic culture.

Therefore, I would like to honour Mr. Michaud for the very important things he did for the nation and people of Quebec.

The hon. member for Rimouski-Neigette-et-la Mitis made me realize that there is one more argument to add to our long list of arguments in favour of promoting sovereignty. We sovereignists have so many arguments that we need to update the list regularly. However, there is one that was offered to us on a silver plate in this financial institutions reform, and it is the terms and conditions governing special treatment, the special status. I think it is most appropriate to use this expression in relation to the National Bank, the national bank of Quebecers, the bank of SMBs.

The 20% foreign ownership of major Canadian banks becomes 65% in the case of Quebec's national bank. I would like my colleague, the member for Rimouski-Neigette-et-la Mitis, to tell us what, according to her, might be the intentions of the federal government in granting a special status not to Quebec but to its national bank.

Without imputing motives to the federal government, what is its purpose in putting the National Bank in such a vulnerable position, totally exposed to foreign control? A crucial sector of our economy could end up in the hands of foreign interests.

I would like to know if the member has an opinion on this, on the deeper motives of this government toward Quebec and the national bank of Quebecers.

[Suzanne Tremblay, Bloc, Rimouski-Neigette-Et-La Mitis, QC]

Madam Speaker, this is an extremely important question. Of course, I do not know what were the government's motives behind such a decision. There is however one thing I am trying to understand. When I looked into my crystal ball this morning, on the train—

[An hon. member]

Where you were served in English only.

[Suzanne Tremblay, Bloc, Rimouski-Neigette-Et-La Mitis, QC]

—where I was served in English only, I realized that the Government of Canada wants the banks to be the key strategic components of its economic development plan.

The government has decided to protect the banks, especially those operating in Canada, against foreign invaders. It has therefore set the limit at 20% of shares per shareholder, and will not go higher than that.

However, in the case of the National Bank, a bank operating mainly in Quebec, which helps out small businesses which in turn greatly support the economic development of Quebec, should the proportion of shares be allowed to increase to 65%, there could be a takeover that would change the whole political situation and result in the National Bank not lending so much money to small businesses anymore.

I am not sure what it is, but what I realized this morning is that there is some danger here, a trap, or a trick, to use one of the favourite expressions of the Minister of Intergovernmental Affairs. There is more here than meets the eye. There is again a double standard that is meant to hurt Quebec.

I hope my fellow citizens will understand that we now have one more reason to create our own country: to make what we want out of our bank.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Madam Speaker, I congratulate you on your appointment to the chair. We look forward to you presiding over the Chamber with a great deal of wisdom, most of which you may have acquired in the various committees of the House. I congratulate you on behalf of myself and, I am sure, my colleagues.

I have just a few things to say about the bill. As many people have pointed out, this is a bill that was before the House before the election. It is a very large bill of 900 pages. Bills having to do with banks tend to be like that, which is probably a good reason for getting it into committee as soon as possible after everybody has his or her say with respect to the principle of the bill and what is in it and what should be in it but is not. That is what I will talk a bit about today.

First, with respect to the positive aspects of the bill, which our critic, the member for Regina—Qu'Appelle, has already highlighted on a number of occasions, one of the things we see as a positive in the bill are the changes with respect to the role of credit unions. This is something the NDP has advocated for many years. The changes with respect to credit unions are certainly seen by us as a positive development.

However, some of the other things that have the appearance of being progressive are not necessarily as progressive as we would like. I am referring to the agency the bill will create, which will be headed by a commissioner appointed by the governor in council. We would have liked a more democratic structure, with representatives from various stakeholders overseeing the FCAC to ensure that it does not become a watered down consumer agency.

This legislation includes only cosmetic measures to improve access to basic banking services. At a time when service charges are on the rise again and banks are forcing us to pay for our own laptop banking, the government has abandoned its commitment, which it made in June 1999 in its financial policy paper, to force banks to provide a low cost account.

Indeed, banks are moving to make it almost impossible to have a low cost account, even the kinds of accounts which many people have had for many years. People are receiving correspondence from their banks instructing them that many of the things that they used to be able to do as part of their basic banking service will now be a matter of the banks charging for them.

It is not enough that the bank presidents already make 30 and 40 times more than the tellers who work in their banks. It is not enough that these people make these obscene amounts of money. No, they are going to ding the poor just a little more, in the name of what, I do not know. Is it in the name of greed? Or is it that euphemism for greed we hear so often in the language of the marketplace, is it that they have to be more “competitive”?

It is the same logic which I am sure will lead, thanks to other elements of the bill, to renewed talk of mergers and to renewed talk of megabanks. Of course with the loosening up of the foreign ownership provisions, we will see not just new merged banks but new merged banks that are owned more by non-Canadians.

These are some of the objections that we have to the bill. It seems to me that at a time when we hear so much from the private sector about the deficiencies of government services, the banks themselves, as major institutions, have become so user unfriendly in terms of charging people for everything they do and for every service they provide that it is a wonder that there are not more people turning to credit unions or hiding their money under their mattress or turning to almost anything but the banks. The banks are absolutely ravenous, it seems to me, when it comes to their pursuit of profit through nickel-and-diming ordinary Canadians who are in the habit of dealing with banks.

There is one thing I would like to see in terms of financial legislation that I do not see here. Perhaps it would not be appropriate for it to be in this particular bill, but then again it might be. It has to do with bankruptcy legislation itself.

I am still dealing with people in my constituency who were done out of wages, severance pay and holiday pay when particular companies went under. Ordinary workers are the last people on the list. Everybody else gets paid off first. Many of these people find it very difficult to turn the page, because they know that a great injustice has been done to them and yet there is no legislative framework in which to pursue the justice they are due in these kinds of circumstances.

What justice is achieved is often achieved over the course of many years. I am thinking, for example, of the people who were put in a terrible situation by the privatization of CN Express and the eventual closing down of that privatized company, or of the workers in my riding who found themselves in a similar position with respect to the sale of CP Express. I am sure the list is much longer. These are just a couple of examples that I am familiar with, where people have really been done in by existing legislation or the lack of protection in existing legislation when it comes to bankruptcies.

Another thing I think we need to have more of a debate on in the House is what has happened to our whole monetary system. It seems to me that when banking legislation is before us it is an opportunity to reflect on this. I do not claim to be an expert in these matters, but there is a growing body of opinion in regard to this in the country, particularly among those who either write for or subscribe to the newsletter put out by the committee on monetary and economic reform, which I think is sent to all members of parliament.

Not so many years ago our system was changed radically when we abandoned the role by which the Bank of Canada created a certain amount of the money that was available to the Government of Canada for the financing of government programs, social programs, et cetera. There is a growing body of opinion, which seems to me to be a minority opinion, that something wrong was done when the private banks were given the exclusive right to create money and then subsequently given the right to create that money without having anything to back it up, so that the money that is created in the country today is money created by the creation of debt. It is debt created by the private banks. This is not unrelated to the situation in which governments find themselves in terms of deficits, debt and the payment of interest.

It seems to me that a debate about money reform in the country is long overdue, as is a debate about looking at ways of recreating, perhaps with some changes—because the world does change and some possibilities remove themselves and other possibilities open up—the role of the Bank of Canada as a place where money can be created and where the government can act in a way that makes it less dependent upon the creation of debt by private banks in order to create money.

These are just some of the comments that I saw an opportunity to make in the context of this particular debate. I hope that this does not lead somewhere down the line to us having to go back into the trenches, or however you want to describe it, in order to fight more and bigger bank mergers. There is every reason to believe that this legislation sets up a process and creates the opportunities for those very same kinds of bank mergers that the government stood in the way of only a few years ago, albeit after much encouragement by the opposition and, in fairness, by some of their own backbenchers.

If the government were serious about preventing these kinds of mergers and preserving competition in a Canadian context, it would not be creating a situation where, by allowing Canadian banks to merge we, in order to get competition, then have to open up our borders to American competition. I am reminded of what has happened in the airline industry: if we get enough Canadian mergers it almost seems to be an instrument by which, ironically, we could end up with more American ownership. As a result of the merger of Air Canada and Canadian Airlines what people are asking is how we are going to get more competition. They are saying that we have to open up our borders to competition from American airlines.

One can see the same thing happening with respect to banks. If we allow our economy to be dominated by one or two big Canadian megabanks the next thing we know we will be hearing the argument that we need more competition, so let us allow Chase Manhattan to open up on every corner across Canada.

[An hon. member]

What is wrong with that?

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

I heard an Alliance Party member ask what is wrong with that. The Alliance Party members never did get it. These are people who make absolutely no differentiation between foreign ownership and Canadian ownership. That is their position, but it is not the NDP position.

It used to be the Liberal position. There was a time when the Liberal Party was known as a party that tried—sometimes in its own feeble way, but nevertheless it tried—to defend the interests of Canada and to defend the notion of Canadian ownership against foreign ownership or at least against a percentage of foreign ownership that was seen to be a threat to Canada's ability to control its own destiny. Those days are gone forever, it seems, those days of the Liberal Party's foreign investment review agency, the Liberal Party's national energy policy and the Liberal Party that was against free trade.

We now have, with the exception of the NDP, and sometimes only recently the Bloc, and then again only some individuals, a political monoculture in the House that seems to accept that it is just fine to have a marketplace dominated by the Americans, aided and abetted by a weak Canadian dollar which provides an opportunity for our entire country to be bought up at fire sale prices by the Americans, a political monoculture that says this is just the invisible hand of Adam Smith working itself out. God is in his heaven and the invisible hand of Adam Smith is doing its work here on earth.

We do not subscribe to that particular creed and never have. We see this bill as one more opportunity for not what we would call the invisible hand but more like the mailed fist of Adam Smith crushing the possibility of Canada ever becoming anything like the independent country that it used to be.

At least my Conservative colleagues, a shadow of their former selves numerically but obviously not in intellectual stature, ran in 1984 and said they wanted to get rid of the foreign investment review agency and the national energy program. They wanted to let the marketplace do all these things. They at least were intellectually honest about what they wanted to do. I am being more than fair to them, because there were a few things that they were not really honest about. By and large they said they wanted to deregulate. They said they wanted to sell out the country and when they got elected they did sell out the country, so people got what they voted for.

The real tragedy here is the Liberal Party. This is the real source of pathos, tragedy and betrayal in Canadian politics. The Liberals are the people who once said they wanted to defend the country. These are the people who used to be in favour of regulating foreign investment. These are the people who said they were against free trade. These are the people who used to worship at the knee of Walter Gordon and others, yet not one of them would qualify any more as a disciple of Walter Gordon. They probably have never even heard of him.

This is the real tragedy in Canadian politics, that those who would defend the country, its economy and its ability to have some control over its own economic destiny have been reduced to a remnant by the political monoculture that has ensued since the passage of the free trade agreements. This particular bill is just one more step along the way. We register our opposition to it.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

Madam Speaker, the member from the New Democratic Party who just spoke talked about selling out the country and American ownership. I would suggest that if we want to slow down the Americans who are buying Canadian companies, we do it by pursuing fiscal policy that will cause the dollar to increase. The dollar is at an artificially low level and that certainly does make it very easy for Americans to buy us out instead of Canadians buying their own companies. I would like the member to comment on that. That is the way to have Canadians buy Canadian companies and keep Canadian ownership: through pursuing proper fiscal policy, which will cause the dollar to increase.

Further though, the member opposite talks about the Canadian Alliance wanting to privatize everything and having that type of policy. I say that is not true. In fact, we have an example today of where we do not support the government, which talks about privatizing the administration of the Firearms Act and privatizing the enforcement, if we can believe it, of the Firearms Act. That is completely unreasonable. I do not support it and my party does not support that kind of policy. It is a crazy policy. It is a taking privatization to the extreme. I would like the member to comment on that.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Madam Speaker, if there are limits to the Alliance's affinity for privatization, it is good to know it, but I notice that the National Post was kind of soft on this idea today in its editorial, so by next week the hon. member might be singing a different tune. He should not be so sure that his party is dead set against this, because the people who really call the shots in the hon. member's political culture might be entertaining a different notion.

With respect to the question about the low dollar, I wish life were as simple as the member makes it out to be. It seems to me that right after the free trade agreement when we had the very deficits that the government has sought to eliminate, we had a high dollar. In fact, one of the conspiracy theories at the time was that there had been an agreement to keep the Canadian dollar high so that the free trade agreement could not work to Canada's advantage. That was within the ambit of the free trade argument itself. That was at a time when the government had not dealt with the debt and the deficit.

Now the government has dealt with the debt, much to the damage of our social programs and of a lot of individual Canadians because of the way it was done, and the dollar is low. We have been assured for five or six years now that the government got the fundamentals right. How long do we need to have the fundamentals right? Is it a sentence? Do we have to get the fundamentals right for 10 years or 15 years or 20 years?

I say that to the member in the sense that I do not think it is as simple as that. I do not think it just has to do with fiscal policy. I am not sure exactly how it works. I am not sure anybody is exactly sure how it works. I am sure the Minister of Finance sometimes goes to bed at night wondering how it works and why the Canadian dollar is the way it is. However, just to assume that if we were to adopt Canadian Alliance policies somehow the dollar would go up is a bit on the simplistic side.

[John McKay, Liberal, Scarborough East, ON]

Madam Speaker, I have not had an opportunity to congratulate you on your appointment. I wish you all the best.

I enjoyed the hon. member's wide ranging speech. I was at times hard pressed to know what it had to do with the subject of the debate, but I heard him talk about fiscal policy, monetary policy and the apparent demise of certain political parties. I was a bit hard pressed to understand the relevance of the bill to those subjects. Then the hon. member opposite brought up national energy policy and firearms legislation. I suppose there are a few things left to debate, but I just do not know what else they are.

I would like to ask the hon. member whether he believes that the passage of the bill will in fact lead to a more rational and sensible process with which the Government of Canada can deal with the demands of the marketplace and the demands of consumers with respect to the whole process of bank mergers and “rationalization” in the fiscal marketplace, and whether he thinks that this bill does bring some sense and some relevance to what is presently a somewhat chaotic process.