Debates of March 30th, 2001

Financial Consumer Agency Of Canada Act

[Anne McLellan, Liberal, Edmonton West, AB]

Hogwash.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

I hear again more support from the Minister of Justice opposite on my point, and I thank her. The fact is banks are not a utility. That is the first thing we have to realize. When governments start telling private entities what to charge for products and services, it is embarking upon a very slippery slope. I do not think it bodes well for the future of the free market in the country.

[Anne McLellan, Liberal, Minister of Justice and Attorney General of Canada]

Madam Speaker, I must rise in response to some of the things that I have heard my hon. colleague say here this afternoon. He has accused the government, I think “of an oppressive regulatory regime”.

I would like the hon. member to explain to us what he means by suggesting there is an oppressive regulatory regime in the country as it relates to financial services? Is the hon. member suggesting that there should be no regulation in the name of the public good of financial institutions? If so, I would ask him to stand in the House and tell the Canadian public who use those financial institutions that he does not support regulation thereof.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Madam Speaker, I appreciate the hon. minister's question and her continued support. She mentions oppressive regulatory burden, and I think that is the key. That is what I am going to be focusing on in my response.

I will give her another example of oppressive regulatory burden from the government. That is a gun registration that does not in any way protect Canadians in their homes or elsewhere. It in fact adds an immense amount of costs to the Canadian taxpayers' burden and at the same time treats law-abiding citizens in this country of ours as if they are criminals, and yet does not provide any level of protection. That is a position that I am sure she would like to speak further on and try to defend, but one cannot defend the untenable.

When the hon. member talks about helping rural communities, I would remind her of what I, the member for Kings—Hants, did on behalf of people in Kennetcook in working with the credit union to ensure there continued to be banking services after the Bank of Nova Scotia closed its branch there. That is the type of progressive and co-operative effort that I would urge her to engage in with me.

I am sure she would appreciate the comparison of the banks' oppressive, egregious regulatory burden with that of her own department with Bill C-68. I am certain she would see that this is a fair comparison because in fact the government, that party, believes in big government telling Canadians how to run their lives. My party believes in Canadians' ability to run their own lives and make their own decisions.

[Dick Harris, Canadian Alliance, Prince George—Bulkley Valley, BC]

Madam Speaker, I would like to ask the hon. member this question. I know he has looked at Bill C-8 quite extensively. He knows the government has been talking the talk about giving more flexibility to the credit union movement in Canada.

Would the hon. member give us his opinion on why the government voted down a very key amendment which would have provided this flexibility to credit unions in Canada in spite of the fact the government has talked about its wish to make this more flexible?

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Madam Speaker, I thank the hon. member for his question. I, at committee, and our party, in the House, did support that amendment.

While the government talks about wanting to encourage competition, to encourage the credit unions and the co-operative movement to compete more fully with banks, this is only a half-hearted initiative by the government to enable the credit unions and co-operative movement to do so.

The fundamental tenet of the co-operative movement is very different from that of the banks. There is a democratic cornerstone to the co-operative movement that is not reflected in the government's failure to support that very important amendment, which would allow credit unions and the co-operative movement to compete more fully and at the same time not have to betray the principles of democratic management which have been a tenet of the co-operative movement since its inception in Canada.

I would suggest that it was a significant mistake for the government not to support the credit union and co-operative movement more fully by recognizing the importance of that movement and allowing and in fact supporting that amendment which would have made a huge difference in a realistic sense.

[Anne McLellan, Liberal, Edmonton West, AB]

Madam Speaker, I have to rise again to respond to what I can only describe as the outrageous response to my earlier question. In fact, I think what we see is why the hon. member's party and other parties are destined to stay in opposition for a very long time.

As opposed to dealing with and responding to my legitimate question about his outlandish assertions regarding oppressive regulation, what does he do? He attacks a program committed to public safety, a program that derives support from well over 75% of Canadians.

I would ask the hon. member to get his head out of the sand and respond to my earlier question. Does he or does he not support reasonable regulation in the financial services sector?

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Madam Speaker, I would like to thank the minister for her question. She is a pretty good questioner and I hope she is practising, because in four years she will have an opportunity to be asking members, including some of us here, questions more regularly, although she will have to hone her questions significantly to less than 30 seconds.

[Anne McLellan, Liberal, Edmonton West, AB]

Answer the question.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

I would suggest that her preambles—

[The Acting Speaker (Ms. Bakopanos)]

I guess it is Friday again. I would like to caution hon. members about impugning motives in terms of questions and answers. The hon. member for Kings—Hants still has 49 seconds to answer the question.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Madam Speaker, I do thank the minister for her question. It is interesting, and perhaps unprecedented in this parliament, to have members of the government looking for answers to questions, because we have been trying to get answers to questions on some very important fundamental issues and the government has not provided us with any answers on these issues.

The minister mentioned regulations again. I think it is important to get back to Bill C-68, the gun legislation that is costing the Canadian taxpayers now upward of $1 billion that could be going into health care, that could be providing rural services, that could provide the money to—

[Anne McLellan, Liberal, Edmonton West, AB]

Answer the question.

[Some hon. members]

Oh, oh.

[Grant McNally, Canadian Alliance, Dewdney—Alouette, BC]

Madam Speaker, I rise on a point of order. It seems as though the Minister of Justice would like to ask a few more questions of the opposition. I am wondering if we could have unanimous consent to extend the question period so the Minister of Justice may ask my hon. colleague one or two more questions.

[The Acting Speaker (Ms. Bakopanos)]

Is there unanimous consent?

[Some hon. members]

Agreed.

[Some hon. members]

No.

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

Madam Speaker, it is a great pleasure to take part today at third reading stage 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.

What we have before the House is a major piece of legislation concerning the overall structure of the banking system in Canada and all the operations of our financial institutions. This bill deserves our full attention. It is the result of a lot of hard work that started when the Minister of Finance announced the mandate and membership of the Task Force on the Future of the Canadian Financial Services Sector on December 18, 1996.

This bill is the result of an extensive consultation process. We finally have a bill we find acceptable after making significant representations and winning on a number of points concerning the implementation of the bill.

This bill deals with major issues such as the banking sector. It deals with changes to the rules governing bank ownership, with bank holding companies and with the whole issue of foreign banks. With globalization, deregulation and new developments, it was important to review the bill. This is what this legislation does in a major way.

However, the Bloc Quebecois had major concerns regarding the treatment of banks with assets of less than $5 billion. We have one of those in Quebec: the National Bank. It may not be the biggest bank in Canada but it is the biggest one in Quebec. We wanted to ensure it would be adequately protected under the act.

The first version of the bill, introduced before the election, contained no provisions to this effect. I believe our representations helped, since we were opposed to Bill C-8 which gave the Minister of Finance too much power over the future of banks. In the first bill, there was no guarantee that he would take into consideration the specificity of Quebec's financial system.

The member for Hochelaga—Maisonneuve rose to say that we wished there were in this bill important additional provisions allowing community reinvestment by the banks. The United States has such legislation, and it has yielded interesting results. We do not have this type of adjustment. People living in regions have seen in recent years a reduction of the number of bank branches. We have noticed that the services provided to customers, namely credit services, are not always those we should expect from a competitive system. We would have liked the bill to provide for greater competition.

After several representations, in particular by my colleague the member for Saint-Hyacinthe—Bagot, who kept a close eye on the federal government, the finance minister and the parliamentary secretary with respect to this issue, the government established guidelines on the reclassification of the banks previously listed in schedule I with an equity capital of less than $5 billion. This is the case of the National Bank.

We would have liked to see these guidelines in the bill. At least, they now exist. They have been published by the Department of Finance and will have to be taken into consideration when decisions are made about the ownership of this type of bank.

Under these guidelines, the Minister of Finance may reclassify such banks in restricted ownership categories. The guidelines set out the framework for the review of transactions requiring reclassification. A certain number of factors are identified, which will have to be taken into consideration by the minister when he has to make a decision following a transaction dealing with the ownership of a bank.

For example, the cost-effectiveness and objectives of the proposal would be analysed. Consideration would also be given to the impact of protecting the proposed transaction on the security and soundness of the bank, on direct and indirect employment, on the location of the centre of decision making and management of the bank, on the needs of consumers, on the business and activities of the bank and on the future prospects of the bank in world markets.

In other words, there are a series of criteria which will oblige the Minister of Finance to consider all these issues when making his decision. This means that the people working at the National Bank, its owners and shareholders, will have to ensure that these guidelines are observed because Quebecers want this bank to continue to serve Quebecers.

In the case of transactions the Minister of Finance will have to ask questions to determine whether there is sufficient protection for direct and indirect employment and where the bank's centre of decision making and management is located.

In this connection, I will digress for a moment. Our arguments have also contributed to a debate within the National Bank, which has adopted administrative rules to protect itself against a hostile takeover, a takeover not wanted by its shareholders. These people took a stand on this issue and on the issue of the bank's head office.

Thus, in this respect, not only through Bill C-8 but also through the way the bank has responded to adopt a responsible attitude, it now seems to us that the necessary protections are there to protect this type of bank and particularly the National Bank in Quebec.

One of the other major criteria that are particularly a cause for concern for me and that the minister will have to consider when he determines the value of the transaction, is the interests of Canadians and, when the institution is operating mainly in a region, the interests of the people in the region.

We know what the word region means to the federal government. Usually, it means Ontario, Quebec, western Canada or the Atlantic. In this regard, it will have to consider the interests of the people of Quebec, if ever there were a transaction relating to the National Bank.

We wish this had been included in the legislation, instead of being covered simply by guidelines, since we do not know who the finance minister will be in a few years. We do not know what pressure he will be under. We know the value and the strength of lobbies here in Ottawa, particularly in terms of our funding rules. This allows for very strong lobbies.

In the past, we have seen banks make very large contributions, especially to traditional parties. We hope that through these guidelines the bill, once enacted, will provide adequate protection to small and medium size banks within Canada.

As I said earlier, this is major legislation because it deals not only with the banks but also with all other financial institutions. As concerns the protection of savers and investors, this bill contains interesting features.

We have proposed many amendments but they have not been selected. I want to put them on the record so that people will know that the Bloc Quebecois took to heart the protection of their interests.

I will say a word later about community reinvestment. In the last parliament my colleague for Hochelaga—Maisonneuve introduced a bill on community reinvestment, and he also tried to have the content of his bill included in Bill C-8. Unfortunately, the government refused.

There is always room for improvement and I am sure my colleague, with his great tenacity, will find other ways to ensure that financial institutions assume their social responsibilities.

When I hear about the profits our banks make throughout Canada, I think we should look at what they do and see whether financial benefits in the regions where they operate are high enough. In the same vein, I think we should legislate in order to have the power to make an assessment of the situation and to require of the banks that they correct the problems, or perhaps establish criteria, a code of conduct or procedures that would go beyond what exists now.

Bank branches have disappeared year after year in my area. Having made a lot of money with our people for many years, when they do not meet the levels of profitability demanded by the shareholders, not because they are in deficit but because they are not meeting the levels of profitability anymore, the banks get rid of their staff, their facilities and their branches. This is always hard on the regions.

When we want to negotiate a loan for a small or medium size business at the regional level, it is always better to talk to somebody we know, somebody who understands our business. I do not think that we can say that we are really happy with the Canadian banking system in that respect.

Let me go back to the proposed amendments. For example, we suggested limiting the number of boards a director is allowed to sit on at any one time. The House certainly understands from the terms of this amendment that we want to ensure, in all logic, that power and financial decision making capacity is not excessively concentrated in the hands of a few.

We were also talking about an amendment on the suppression of potential conflicts of interests between board members and those who supply goods and services to the institution. This is also self-explanatory.

Amendments also provided for the requirement to submit financial statements for review and discussion during the annual shareholders' meeting. Hon. members know that the banks' small shareholders are more and more interested in having a say in decision making. They do not want to just sign proxy letters; they want to be able to influence decisions, even if they are only minority shareholders. We want them to be able to have a voice. The purpose of this amendment was to enhance their powers.

There was also talk of making shareholder presentations for approval of the officers' remuneration policy. This too is in line with the banks' social vocation. When we heard of inordinately high salaries being paid to people who may have generated substantial financial profits, but did so at the expense of the bank workers, with more than 1,000, 2,000 or 5,000 jobs cut to maximize profits, while officers were getting considerable salary increases, we figured it would be extremely appropriate to bring in an amendment. It did not make its way into the bill however. There was one but it was rejected. We feel it ought to have been part of this bill.

There was also talk of proposing a code of procedure for shareholders' meetings, a requirement for companies to make a full report of each and every shareholders' meeting to be sent to each shareholder, all with a view to improving the transparency of the banking system.

All of these amendments would have made this bill even better and given it more transparency. They were rejected, and the way it was done strikes us as improper. We do not question the pertinence of the bill, but the amendments would have made it possible to make the bill a more significant one.

I will say a bit more about community investment. It is based on the banks' social responsibility to the community. It is still not a part of C-8, despite the comments by the Bloc and, as I was saying earlier, the member for Hochelaga—Maisonneuve.

He proposed important objectives for the bill, including having the banks analyze their operations, their systems, their rules and their practices and measure the spread between deposits and loans to designated persons in a given community. This way one can see the economic impact a bank has on a community, its relevance, and assess whether it has fulfilled its social role and table a report on the remedial action to be taken. The superintendent of financial institutions should have been required to propose assessment criteria to promote implementation of the concept of community reinvestment.

This is therefore a positive contribution that could have been made to the bill but that the government rejected. It still seems relevant to us but unfortunately it was rejected.

I would like to remind members of something my colleague from Hochelaga—Maisonneuve said: “There are whole communities where banks are pointedly absent and, when they are present, there is a real problem of availability of banking services for low income individuals that only the passage of legislation will correct”.

I congratulate him on his very accurate view of what goes on throughout Quebec. The member for Hochelaga—Maisonneuve is from an urban centre, where the problem of people with limited incomes accessing banking services must certainly be an issue.

This quote shows as well that he is informed on the situation throughout Quebec, in the regions, and that a member from the Montreal area can be very much aware of the situation throughout Quebec. This quote reflects that. This is what I was saying earlier. In Quebec, the problem is often one of not finding bank branches any more.

We hope that Bill C-8 will at least solve the competition problem to provide for good competition and adequate services in our regions. However, it will not solve the issue of community reinvestment because the government refused to act on it.

In this regard, we could say that market forces do not support economic growth. The community is less competitive when there are community disinvestment.

In the end, a community where investment ceases to flow is a community where there is no capital movement. When capital movement slows down because banks invest the money from the checking and saving accounts of the people in other regions, the population of the affected community loses out.

Overall, the bill will change and update the banking system and all the other financial institutions. I think that it includes many positive aspects. It results from relatively broad consultations. We had major concerns regarding the protection of banks like the National Bank, but thanks to our pressing demands, the Minister of Finances produced guidelines to protect them.

Even though they are not included in the bill, these guidelines represent an improvement that will ensure an adequate level of protection. We also think that the banks themselves can take steps to improve the situation. However, we think that the government could have taken this opportunity to make the administration of banks and the functioning of boards of directors more transparent.

We are sorry that these amendments were rejected. We are also sorry that our amendments on community investment were not accepted. However, we believe that overall it is a good piece of legislation which deserves our support.

When proposed measures seem positive the Bloc Quebecois is happy to support them. In the last parliament I think that we, in the Bloc Quebecois, were the ones who most often supported the government when we deemed it appropriate to do so. We know how to address the real issues people are faced with in their everyday lives. When we disagree, we say so, hoping to find interesting solutions.

To end the week on a bill such as this one is a lot more interesting than the general attitude shown by the Liberal government this week. For example, we had to set the record straight on Thursday. During statements by members the member for Laval East said that we had not spoken about the vast police offensive against criminal biker gangs when the previous day, the same day the police operation was carried out, the member for Berthier—Montcalm had made a statement on that very subject.

It seems that the Liberal majority is not paying much attention to the debates, as evidenced by the fact that yesterday afternoon, throughout oral question period, the majority kept telling us that the opposition was not interested in the real issues, that its only concern was the Auberge Grand-Mère. Half an hour later, when the question was put on a motion, the Liberal majority was unable to find enough members to ensure continuation of House proceedings.

As far as I am concerned, this clearly demonstrates how irresponsible the Liberal majority is. We taught them a good lesson. Even from the opposition side, the Bloc Quebecois can address the real issues like the integrity of the Prime Minister. We are also able to consider any other problem coming our way, and we do so. We make representations. We make our points forcefully. We believe the House of Commons should be taken seriously, should hold real debates.

This is why I think we should conclude consideration of Bill C-8 this afternoon. It will give some sense to the House business. I hope Liberal members will go home this weekend and acknowledge that they made a serious mistake in believing that they could determine for the House of Commons what the important issues are. However, I think that the people of Quebec and of Canada need to be sure that their Prime Minister is honest but also that other problems are being dealt with. So I hope the Liberals have learned their lesson for the week.

[Jean-Yves Roy, Bloc, Matapédia—Matane, QC]

Madam Speaker, I heard my colleague from Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques talking about community reinvestment.

In my region and my riding, we have just experienced the closing of two branches of a major financial institution in two important centres, Matane and Amqui.

I would like to ask him a question on a point that I am very interested in, because these two regions are going through a crisis at this time. What happens when a financial institution leaves a town with bank accounts, with depositors' money, and transfers this money to another town? What does it mean for a town to lose a significant amount of money, a lot of capital, when it is already in a difficult financial situation?

I ask my colleague to elaborate.

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

Madam Speaker, I am happy that the hon. member for Matapédia—Matane is actually giving us a very specific example of the reality I was describing in my speech. Matane and Amqui are small towns, and when a number of jobs are lost because a bank branch is closed, there is a major impact. In a large city, this could translate into the loss of hundreds of jobs.

I think the solution was to be found partly in the proposal of the hon. member for Hochelaga—Maisonneuve. He wanted to ensure control of community reinvestment by banks. I believe this could have been an objective of this bill. It could have led to an interesting solution.

I also hope that Bill C-8 once passed will allow greater competition in the banking system, thus forcing banks to finally have more respect for their clients. I would also challenge people as shareholders, as bank clients, not to be afraid of making representations to see where their capital is going and how it is used, to really be actors more than spectators, in the development of the financial situation in their region.

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Madam Speaker, in our caucus and in the House, the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques is an asset. He makes a brilliant contribution to our debates. I hope the Minister of Justice has understood these recommendations, and that she also understands what I am saying.

I have two questions for my colleague. Does he think it is possible that the pattern of lack of banking services in Canada is a reflection of the geographic distribution of poverty?

I am very disappointed with the Chair, Madam Speaker, but not with you in particular. I am very disappointed that my amendments, which had been accepted previously, have not been accepted this time. Some day, in fact, we should discuss with the Chair about the excessive role given to traditions from the United Kingdom. But that is another matter.

Does my colleague agree with me that as parliamentarians we cannot really fight poverty if we do not secure access to financial services for all Canadians? I am sure that in Alberta, where the Minister of Justice was re-elected with a comfortable majority, banks are also closing some branches.

Just this morning, I tabled an antipoverty bill, which brings me to my second point. I hope we will be able to count on the support of the Minister of Justice—who is spending a lot of time in the gymnasium with me—to amend the role of the Canadian Human Rights Commission and to recognize that social condition must be included in the Canadian Human Rights Act.

Does my colleague believe that including “social condition” as a prohibited ground of discrimination could make a difference for the poor in this country?

With the unanimous consent of the House, the justice minister could be given two minutes to answer.

[The Acting Speaker (Mrs. Bakopanos)]

I am sorry, I believe the question was for the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques.

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

Madam Speaker, I listened with interest to the question from my colleague from Hochelaga—Maisonneuve. There is indeed a direct connection between the presence of banks and economic development.

We should perhaps hearken back to what happened in the early 20th century. Mr. Desjardins, a former clerk of the House, came to the realization that small investors had no way of maximizing their savings, and this led to the creation of the Dejardins movement.

Its creation was prompted by the inability of the banking system of the day to meet the needs of small investors, people with only a small amount of capital. Now, in the early days of another century, the solution to the problem lies perhaps in the proposal we have made relating to community reinvestment.

If we have not managed to convince the Liberal majority to include this in the bill, the banking system might perhaps develop a code for itself, to show the public that they can achieve the same result on their own. I have some doubts that this would be something it will impose on itself. I think the hon. member for Hochelaga—Maisonneuve needs to continue his action, to continue to call for legislation to be put in place. Nevertheless, I call upon those in charge of the banking system to do it for themselves.

As for the second question, on making social condition one of the grounds for discrimination prohibited the Canadian Human Rights Commission, this strikes me as a good approach to ensure a solid foundation which any subsequent legislation will have to take into account.

As we saw with the human rights charter and with basic documents of that type, this can have an impact. Sometimes it suits our needs and sometimes it does not. If the suggestion of the hon. member for Hochelaga—Maisonneuve was implemented, we as a society would ultimately benefit. Social condition is an important issue that deserves to be taken into consideration to ensure that it is not an accepted grounds of discrimination, but rather something that drives us to amend the legislation and provide equal opportunities to everyone in our society.

[Joe Comartin, NDP, Windsor—St. Clair, ON]

Madam Speaker, I have worked extensively with the credit union movement in Windsor and across Ontario. Looking at the legislation I cannot help but wonder if more could have been done to facilitate the development of the credit union movement outside Quebec in a way that mirrors the success the Desjardins movement has had in that province.

Could my hon. friend from the Bloc suggest improvements to the legislation that would help the credit union movement across Canada duplicate the successes that have occurred in Quebec with that movement?