Madam Speaker, the presentation made by the member for Hochelaga--Maisonneuve may sound like a good thing to a lot of people but it is fundamentally unrealistic to even consider a bill that would impose upon our banks an obligation for them to do business with people who have either no credit history, very little credit history or even a bad credit history.
Institutions like banks are not in business for that in the same way that other companies like Bombardier, Air Canada, Sears, Wal-Mart and caisses populaire credit unions in the province of Quebec are not in business for that. These companies are in business to make a profit for their shareholders or for the owners of a privately held company. They prosper providing they implement sound administration and financial management practices.
Bill C-229 is very confusing because it says that branches of banks to which this part applies, while respecting sound administration and financial management practices, should get involved in granting loans to people in many cases who would be poor credit risks to pay them back. To get into that type of experience is a conflict of sound financial management practices.
I also feel that this touches on some type of affirmative action where a company is required to do business with certain groups of people who under normal circumstances would not be part of its business day or its business plan.
It is simply not the government's place to impose this on a private or public business that has grown. Banks have grown to quite an enormous size by doing business in a sound financial manner. It is not the government's place to penalize them by telling them they have to deviate from the practices that brought them to where they are today. They pay dividends to their shareholders and dividends to pension funds that have invested in them. They cannot be penalized because they are successful and told that they have to do things in their business that they would never consider in a normal business practice.
I take exception to the fact that the member indicated that banks do not, as part of their normal practice, become involved in community reinvestment. Canadian banks and the financial services sector are probably the largest contributors to charities in every community across the country where they have branches. They also make hundreds of thousands of loans to small and large businesses in every community across Canada.
They take that money, expand, create more jobs, contribute to the local economy and improve the quality of life for people who work in small businesses which have been able to expand because they have received loans from financial institutions and have run their businesses well. Some started at zero and built their businesses up through sound financial management.
Banks already invest in communities in a huge way, far more than any other industry sector in the country, I believe. To suggest that they are somewhat lacking as community corporate partners is totally misleading.
I know that in the town of Prince George where I live, the Royal Bank, the Scotiabank, TD Bank and CIBC put tens of thousands of dollars into the community for numerous charities and projects in the city, and they do this as part of their corporate community responsibility. To suggest that banks are the big, bad guys with vaults full of money and that do not care about the communities they do business in is quite wrong.
As well, the member talked about the big, bad banks that closed branches to rationalize their business. Would any company in Canada continue to operate a branch in the event that it was losing money on a continuous basis? I think not. That is how companies become successful. They make good, sound business plans and they stick to them. When things are not working, they do whatever they can to turn it around. If it does not turn around, they have to take other steps, and sometimes that involves closing branches.
As the member pointed out, banks are under some responsibility to give notice and to try to implement whatever relief they can to ensure the impact will be as little as possible.
To suggest that the bank should pay into a special fund an amount equivalent to 5% of its income for the financial year is like another tax. That is totally unrealistic. That takes operating capital out of the bank. Banks are already hit with a capital tax. Unfortunately, the government has still not done away with it.
While the member believes in this bill, and I respect the fact that he does, I find it is quite unreasonable to consider implementing something like this.
Microcredit or microlending is not appropriate for banks. That comes more into the business realm of perhaps smaller financial institutions or companies that may see that as an opportunity. It might even be considered an entrepreneur's dream to someone who had $25,000 which they wanted to invest and they saw an opportunity to lend out $500, or $1,000 or $300. Given sound financial business practices, that could be an opportunity for someone who wanted to get into that type of business.
However to suggest that our chartered banks get into that business and that if they do and they violate one of the many rules in the member's bill, they would be fined or sanctioned or drawn and quartered in some way is not realistic.
We cannot accept this bill like our friends across the hall. Banks are there for a purpose. They are there to serve their investors. They are there to contribute through their dividends to pension funds. It requires that they be strong, that they be profitable, that they continue to operate under very sound, stable and secure business practices. Quite frankly, lending money to people who may not pay them back does not fit into that criteria.