House of Commons Hansard #29 of the 37th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was vote.


Parliamentary ReformGovernment Orders

5:10 p.m.

An hon. member

Why don't they?

Parliamentary ReformGovernment Orders

5:10 p.m.


Steve Mahoney Liberal Mississauga West, ON

I will tell the member why, and I thank him for the question, because the opposition decided that it will not allow committees to travel. Why? Because when the secret ballots happened, after that last illustrious vote, five committees did not elect people to the position of vice-chair from the official opposition.

What do we have? We have the defence critic for the official opposition and another one from the Bloc Quebecois saying that is it, committees are not going to travel and they are going to shut them down. Is that not ridiculous? People should also know that those vice-chair jobs come with an additional emolument of $5,000. I guess their noses are out of joint and their pockets are a little lighter because they did not get elected. However, they are the ones who forced the issue to come to this place. They have the power.

That is another misconception, that somehow opposition members have no influence. I would suggest that if members on that side of the House or this side of the House really believe they have little or no influence around this place, they should go home. They should resign their seats. If members believe that they are ineffective, that they cannot make things happen in this place by working through committees, by working with ministers and colleagues on all sides of the House, then they are doing a disservice to the people who sent them here to make a difference.

Let me provide another point of view. Members say they want to reduce the partisanship. Sure they do. We were elected as Liberals and they were elected as Reformers. They swapped over and became the Canadian Alliance. Perhaps there was another party in the middle, I cannot quite remember. Those folks were elected. There are some newly converted Progressive Conservative members as well.

Everyone is elected by participating in his or her party and by winning a nomination in a riding. Then when a member arrives here, that person is expected to denounce his or her party, to say that member is not going to support the party. I have news for them. If a person on my hockey team intentionally shot the puck in my team's net, I would not want that person on my team any more. It is pretty simple.

Does that mean it is mindless? Au contraire. I have a benchmark with which to compare the caucus system in this place because I served and worked for eight years in the caucus system at Queen's Park. At Queen's Park it does not matter who is in office. The command and control is in the corner of the pink palace, as it is referred to. They let people know what they think people need to know. It is a system that needs some opening up.

I have been very impressed with the caucus system here. We sit in our regional caucuses. In my case in the greater Toronto area on a Tuesday night colleagues get together to debate issues. People would be astounded at how often we disagree with one another. It is a very healthy atmosphere. We receive reports and we hear from other people outside. People come to talk to us at the GTA caucus. Of course there is the rural caucus, the western caucus and the Atlantic caucus. We meet with all of these people.

Then on Wednesday morning we meet, in my case, in the Ontario caucus, which includes the southwest Ontario, northern Ontario, and GTA caucuses, as well as the central and eastern Ontario caucuses. Everyone reports there. Once again we have all the opportunities for discussion. My point, of course, is that we are a team. We get together every Wednesday morning.

Our Prime Minister claims that Wednesday is the most important day of the week and he is absolutely right. If a caucus member wants to make a point, fight an issue, go after something that is important with a ministry, if a caucus member wants to take on a minister, he or she can. Our Prime Minister says not to stand up and make general statements but to name names.

Once we are finished in the Ontario caucus we go across the hall to the national caucus. That is where every member of the Liberal caucus should be on a Wednesday morning unless there is pressing work outside Ottawa and a member cannot be there. Even the senators attend. Lo and behold, it is quite remarkable that we disagree from time to time.

With regard to reform, I would like some kind of confidence that what I say at the microphone in caucus does not appear in the Hill Times literally word for word within a matter of hours. That would be nice. But we are dealing with a large group of men and women and it is pretty difficult. They have their relationships with the media and we get some leaks from time to time. It is a little frustrating. Of course the media and the opposition love to take advantage of that particular situation.

However, this caucus system works. Stand up. Show me what the rules are. That is what I said when I was elected. Show me where the doors are and I will figure it out. I do not need to come in here and whine poor me, I do not have enough power, I do not have enough authority, I need to change the rules around this place. I know what the rules are and I make them work for my constituents. Any member in here who does not do the same thing, in my view respectfully, does not deserve to be here.

Let me talk about another example. Earlier I believe it was the member for Burnaby—Douglas who asked a question of the member for Yukon about whether we should have a debate and a vote on whether or not we should participate in the war in Iraq.

Are we are going to abdicate that kind of decision making authority and responsibility by the government to 301 people, and maybe some of them will not be here, and simply go by the results of that vote? The government and the country would become laughing stocks.

We have been elected to do a job and we will do the job within the rules that exist. If we want to make some changes because some people feel they cannot get in the back door, we can discuss it but why do we have to take up so much valuable time? We should be dealing with issues that are important to all Canadians, issues that matter to them.

I was not going to debate on this particular issue because I found it frustrating. I want to be careful of the wording I use here, but it is something retentive. We tend to look inward at ourselves and ask what can we find that is broken, what can we find that is wrong and go around like nest pokers. That is what we called it in my municipal days. Someone would go around with a long pole and poke nests to see if there were any birds in them. That is what is happening here.

There are a bunch of nest pokers on the other side of the House who are going around and saying, “Let us see if we can poke some trouble out of there”. Why do we not deal with substantive alternatives?

The vote on electing chairs and vice-chairs to committees carried. Fine, it is over and gone. What is really interesting about that is that members should have the experience of running to be caucus chair in a caucus the size of this one. That is done by secret ballot. People will look at someone right in the eye and say they will vote for him or her but we know that they did not, or we do not know because it was by secret ballot. Now we are going to perpetuate that problem all the way down to every committee.

In fact we did have one of our colleagues who was nominated after that vote took place to become vice-chair of a committee. Contrary to the wishes of the consensus from the Liberal side she was nominated by the opposition, except that after the nomination there was a secret ballot and she is now vice-chair of the committee. In essence, with her vote and the opposition vote, they actually defeated the government side. It is brilliant strategy. I wish when I was in opposition I had thought of it but in reality it is just a way to try to upset the apple cart and to turn things on their ear.

Parliamentary ReformGovernment Orders

5:20 p.m.

An hon. member

It takes a while to catch on.

Parliamentary ReformGovernment Orders

5:20 p.m.


Steve Mahoney Liberal Mississauga West, ON

The hon. member said that it takes a while to catch on. No, I knew it right from the start.

I tried to say to my colleagues in caucus, let us not be fooled. The opposition was not sent to Ottawa to help us. When the opposition puts a motion on the floor, it does not do it so it can say to Canadians, “We love those guys over there in the government. We think they are really good folks and we are putting the motion on the floor so we can support them”. That is not the role of the opposition.

The role of the opposition, obviously, is to oppose but when it does that, it should try to put forward some alternatives. That is what we do not see from the opposition. Day after day we see carping and attacks, and for much of the time personal attacks on members on this side, not only members of the cabinet, but it is even to the point where recently a parliamentary secretary was personally attacked for comments he made in debate in this place.

I close by saying that it is unfortunate we cannot take the time in this place to debate matters that are of concern to Canadians, not parliamentary reform which frankly I think makes most Canadians want to stick pins in their eyes.

Parliamentary ReformGovernment Orders

5:25 p.m.

The Acting Speaker (Ms. Bakopanos)

There is not even one minute left. I will take one question.

Parliamentary ReformGovernment Orders

5:25 p.m.

Progressive Conservative

Loyola Hearn Progressive Conservative St. John's West, NL

Madam Speaker, it is too bad there is only a minute because there are a lot of members over here with questions.

I have never heard such tripe in all my life. To pretend that we are wasting time here when the House leader, the one who dictates the agenda, is the very one who commandeered us into discussing this motion. I agree that it is useless. It is up to the government to implement parliamentary reform.

I just wonder--

Parliamentary ReformGovernment Orders

5:25 p.m.

The Acting Speaker (Ms. Bakopanos)

Order, the time has expired. The House will now proceed to the consideration of private members' business as listed on today's Order Paper.

Banking ActPrivate Members' Business

November 21st, 2002 / 5:30 p.m.


Réal Ménard Bloc Hochelaga—Maisonneuve, QC

moved that Bill C-229, an act to amend the Bank Act and the Statistics Act (equity in community reinvestment), be read the second time and referred to a committee.

Madam Speaker, I would really have liked to ask the hon. member for Mississauga West a few questions; unfortunately, there is not enough time, but I think we have here a rather eloquent example of the wrong way to carry out one's role as a parliamentarian, by not taking into account the positive work of the opposition.

Each of us, as members of Parliament, have financial institutions in their ridings. Each of us, whether in large urban centres or in rural areas, have in our communities people who have been poorly served by financial institutions.

The bill before us has had a long life, given that I had the opportunity to introduce it on three occasions and it was debated twice already. Each time, the government refused to consider that, while we live in a democratic society, while we have a Charter of Human Rights and while there is a Superintendent of Financial Institutions, it is possible nonetheless that, in reality, the way banks are behaving may be such a concern that there may be a need to look beyond the border to find solutions to the problems we are experiencing.

In 1998, I travelled to the United States to study the community reinvestment act. This is a piece of legislation that was passed by the U.S. Congress in 1977. So this is second generation legislation. It was reviewed under the Clinton administration. Unbelievable as it may sound, given that the U.S. does not have a society with a propensity for interventionism and that Americans are strong believers in private enterprise and market forces, they passed legislation making it possible to assess how well financial institutions, mainly but not exclusively banks, meet the credit service needs of all consumers, and the most disadvantaged in particular.

Those who are well off, who earn a respectable income, are financially solvent, have no problems with financial institutions. Today's debate concerns those who are less well off and who are met with prejudice when it comes to their ability to honour their financial obligations.

I remember the time, just before the MacKay report was released, when we had to ask questions in the House on a regular basis because financial institutions refused to even consider opening a bank account for a person if he or she did not have three pieces of identification. Clearly, if a person was receiving social assistance or was thought to be economically disadvantaged, it was extremely difficult to open a bank account.

I will acknowledge that the situation has improved somewhat. An agreement was reached between the Canadian Bankers Association and the superintendent of financial institutions; now the banks do not require three pieces of identification, only one, and it has been agreed that a bank account cannot be denied someone simply because he or she is on social assistance. However not all bank branches and not all financial institutions follow this regulation to the letter.

I would also like to applaud some of the residents of Hochelaga—Maisonneuve. The Parliamentary Secretary to the Minister of Health knows this, there is no room for defeatism in this riding. If there is one area where the residents are dynamic, where they believe in standing together and where there is no place for resignation in policy, it is indeed the riding of Hochelaga—Maisonneuve.

Guy Biron, one of the most involved citizens in Hochelaga—Maisonneuve, put together a coalition; he is the chair of the senior citizens issue table, but that is not all he does. He is also involved with ASTA at the SHDM in Rouville. He is a man whom life has treated very well: he has a happy home life, has had children and contributes much to his community.

In 1977, this coalition made the following finding in the riding of Hochelaga—Maisonneuve. We are not going back 75 years. We are not talking about before industrialization. At the time, there were close to 30 financial institutions, 27 to be exact. Today, there are only 11 left. These 11 financial institutions include five banks. This shows how financial institutions have deserted poor communities. Option-Consommateur, which is a non profit organization, estimated that, over the past 20 years, in the City of Montreal alone, 150 bank branches have shut down.

Of course, these branches did not give advance notice and they did not care about the future of their clients. They shut down to streamline their operations. These branches leave without being at all concerned about the impact on our communities.

In a society like the United States, this situation would have been much more difficult, not impossible but much more difficult to watch. Why? Because the beauty of the Community Reinvestment Act is that it ensures that there is someone in the system to monitor how financial institutions fulfill their responsibilities.

Take the example of a bank like the Morgan Citizens Bank of New York. If it does not meet the credit needs of the Hispanic community or of the poorest segment of the Afro-American community, everyone will know about it on March 1 of each year, when those responsible for implementing the law release a report in which they assess institutions by giving them an A, B, C or D rating. This is somewhat like in school or in university.

Of course, the beauty of the community Reinvestment Act is that it ensures that consumer groups follow this public disclosure exercise. Banks must provide explanations when they stop their activities in certain areas. Consumers take this into consideration when the time comes for them to choose a financial institution. Not only do consumers take this into account when the time comes to choose a financial institution, but the bodies responsible for enforcing the law also take this into consideration when the time comes to authorize mergers or any other related operation.

It would not be that hard to have something similar to the community reinvestment act in Canada. Why is the government against such a bill? For a number of reasons. First, as we know, banks have one of the best lobbies on Parliament hill. Also, banks make large contributions to the Liberal Party's campaign chest. I certainly hope it is not the only reason for the government's action, although I am sure it has something to do with it.

As members of Parliament, we have to realize that we cannot fight poverty if we are not willing to instruct financial institutions to grant credit to each and every segment of society.

I regularly go over the reports of the Canadian Welfare Council, an organization set up to advise the Minister of Human Resources Development. Our society has not gotten any richer.

In 1968, Prime Minister Pierre Elliott Trudeau, as head of the Liberal Party, campaigned for a just society. There were concerns about poverty. Now, over three decades later, we realize that there are more and more poor people and an increasing concentration of wealth.

There is a paradox in my riding of Hochelaga—Maisonneuve. Although it is very poor, it is expanding economically. It is thought to be the next Plateau Mont-Royal. And as you know, Madam Speaker, you who are so well connected, the Plateau Mont-Royal is where artists meet and things happen in Montreal.

Hochelaga—Maisonneuve is said to be the next Plateau Mont-Royal. It is the place with the third-highest number of building permits, particularly where I live near the Olympic stadium. Young couples are abandoning the suburbs, abandoning the downtown core, and coming to settle in Hochelaga—Maisonneuve. That is understandable; anyone who lives there knows it is a great place to live.

There are four metro stations. We have rue Ontario. We have a good public transit system. There are a lot of strong community groups. Anyone who lives there knows it is a great place to live .

I can give one couple as an example. Jannie Beauchamp, a master's student, and her partner, also a master's student. They wanted to settle in Hochelaga—Maisonneuve and make it their home. They made a lot of preparations. They phoned 32 different insurance companies and all refused to insure them, as if Hochelaga—Maisonneuve were a disaster area.

This is exactly the practice that was used in the United States in the 1930s, 1940s and 1950s. It was called “redlining”; the financial institutions took the map of the States and circled certain areas in red, hence the name. These institutions systematically refused, regardless of the details in the file, regardless of the merits of the case, to lend money to people who lived in those areas.

We in Canada want to believe this is not so, not possible, but it is exactly what is happening. The financial institutions, the banks, practice systematic “red lining” style discrimination. As long as the legislator does not take the necessary steps to force the banks to explain themselves, to admit why they are totally deserting certain communities, the situation will continue unchanged.

There is no point in having a securities commission, no point trying to bolster the financial institutions if they do not acknowledge their responsibility to meet the credit needs of our entire population. Once again, this is not an excessive measure.

My bill recognizes, because it is just common sense, that banks cannot be asked to lend to people who are not creditworthy. They cannot be asked to adopt measures that would place them at a competitive disadvantage. We are just asking them to give people the tools they need to improve their well-being.

I will give you an example. In Hochelaga—Maisonneuve, within our community economic development corporations, these cooperation bodies that were created in the early 1990s, there are micro-credit circles, also known as borrowing circles. It means that people vouch for one another. If someone's washing machine breaks down at the end of the month and that person cannot easily find $300 or $400, he or she can have access to this kind of cooperation. If someone wants to start up a business and needs $300,000, $400,000 or $500,000, it is not so hard to find. But when a person needs $5,000, $6,000 or $7,000, it is complicated because financial institutions are not in that market.

These are examples where equity measures on the part of banks could enable them to invest in micro-credit activities. We are not talking here about billions of dollars. There are cases where partnerships could be formed with community groups, which is rarely done. I did not say never because, in Hochelaga—Maisonneuve, one bank gave its head office that had become vacant to a community group called L'Avenue. There is also the Caisse Maisonneuve that gave its head office to the Chantier de l'économie sociale. However, these examples seem to be exceptions in the sad track record of banks and financial institutions.

I will rise again later to conclude this debate, as I am allowed to do under the rules of this House. I hope that the government will agree to make my bill votable and that my bill will find support in each party.

Banking ActPrivate Members' Business

5:45 p.m.

Oak Ridges Ontario


Bryon Wilfert LiberalParliamentary Secretary to the Minister of Finance

Madam Speaker, I rise today to discuss Bill C-229, an act to amend the Bank Act and the Statistics Act. The bill would require banks to report on investments made in electoral districts where unemployment is on par or above the national unemployment rate. It would also require that every individual bank branch set aside 5% of its income to further micro-credit financing in the electoral district where the branch is located.

In essence, the bill is an adaptation of the U.S. community reinvestment act, CRA, that the U.S. Congress passed in 1977. As such, I would like to remind hon. members that the community reinvestment act was enacted in response to concerns that American banks were redlining certain neighbourhoods; that is, accepting deposits but not authorizing loans in low and moderate income neighbourhoods.

I would like to remind all members that in 1998 the task force on the future of the Canadian financial services sector, the MacKay task force, undertook extensive research on this issue. It determined that the conditions that led to the community reinvestment act in the United States were not present in Canada. Both the House Standing Committee on Finance and the Standing Senate Committee on Banking, Trade and Commerce supported this view.

To quote the House committee, “In an industry that is continually evolving, the application of a Canadian CRA would be extremely difficult and costly”.

The Senate committee echoes this stating, “The Committee also believes that the CRA approach would be onerous, costly and a regulatory burden on financial institutions”.

Moreover, consumer groups such as the Consumers Association of Canada generally supported this view.

The bill, which on its face may seem reasonable, creates an onerous burden on financial institutions. Every bank will need to report for every branch the amount and the distribution of deposits, loan applications, loans granted and loan recalls. Furthermore, the requirement would entail that each branch break down the numbers into groups of $10,000 increments. To top it off, the bill would require that the terms and conditions of the loans, a private matter between contracting parties, be reported upon.

All of these measures are onerous and costly to comply with. The result of implementing the bill would, to quote the MacKay task force, “add substantial regulatory burden and cost to financial institutions and government”.

I must question what benefit consumers would derive from knowing in $10,000 increments what the lending practices of the branch had been. Moreover, this type of undertaking would require a lot of time to compile the information. Who will ultimately bear the cost? Consumers.

The potential costs to financial institutions are compounded by a proposal that requires every branch to reserve 5% of its income, not profit, but income to fund microcredit lending. That is pre-tax dollars. In this respect the proposed legislation goes well beyond what the community reinvestment act requires and it does not stop there.

The clause is worded such that every designated person who applies for a microcredit loan must be provided with one regardless of the merits of the proposal. This is simply bad public policy.

What is to happen if the applications for micro-credit exceed the legislated 5% requirement? Will banks then be required to take funds from their other investments to attain this legislative requirement? Alternatively, what happens if the sum total of applications is below 5%? Furthermore, on the question of loan quality, will we end up having to force a bank to shift money from prudently sound investments to high risk investments? Do we really want them to do this? What does this mean for the other customers?

I cannot stand here and support the bill. Parliament determined that this type of legislation was unnecessary only a short while ago. Furthermore, the bill would create a very onerous financial and regulatory burden on financial institutions and could lead to a situation where banks are forced to use good money to chase riskier investments to the potential detriment of sound investments.

It is for these reasons that I cannot support this bill, and I urge my colleagues here today not to support it as well.

Banking ActPrivate Members' Business

5:50 p.m.

Canadian Alliance

Dick Harris Canadian Alliance Prince George—Bulkley Valley, BC

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.

Banking ActPrivate Members' Business

6 p.m.


Brian Masse NDP Windsor West, ON

Madam Speaker, it is pleasure to rise in the House to talk about this very important issue. I too want to clarify this. I do not think that the intent of the bill is to attack banks or their charitable donations in Canada. It is more a debate about commerce in our country, about where we are headed, and about financial institutions in general and what type of role they should play in dealing with some of the problems we have as a country right now. Banks can play a larger role. I think they could and I think it would be a good investment opportunity.

I also want to note that right now with regard to lending practices we know that some of the banks have actually had some very questionable business lending practices to larger corporations and larger institutions, which have actually affected their earnings and profits. They have not been the small guy, so to speak, that has been characterized in terms of this particular initiative.

We need to recognize that this is not just a rural issue. It is an urban issue too. It is a situation that has developed because we have seen banks leave the impoverished urban neighbourhoods. I can tell the House for a fact that in my riding bank mergers have had a direct impact on our urban setting. Because they have consolidated, we see empty storefronts and we have seen a lot of different planning go out the window. They have simply usurped the investment and made one or two choices available to consumers. That has had a detrimental impact, not only just on people's choices in terms of the type of service they receive, but also on the urban landscape they participate in as storefronts are closed. That consolidation also has had a positive impact, I guess, with the massive profits that the banks have been able to recoup through that business development plan, but at the same time there has been an incredible loss of employment.

There is one issue in this whole process about commerce that we do not often think about, which is Internet banking, and I will give a good example. Here is a situation that is really interesting. As a consumer, I have to purchase equipment. I pay for that equipment: the computer, the screen, the printer and all those different things. On top of that I pay a monthly service fee to use the Internet. I have to pay to use the access service of online banking. At the same time, I use my own personal time in that process to do the actual physical work. Here is what is ironic. The bank should be paying me for that investment, but I am paying the bank for that service. It is another service fee. At the same time, the bank lays off somebody. It ends up that I take somebody out of a job in my community and I pay for all the infrastructure to do it. I actually physically sit down and do the work.

The big winner in this situation is the bank and the big loser is the consumer and I think we have to recognize that. That is the bank's business plan and that is fine. It is up to the bank to be able to go through it, but we have to at least identify that it is a problem or at least a result of policy directives by the government.

I think there is a connection with regard to the lobbyist suggestion. We can look back in terms of when we had the bank merger. I just came from a discussion on Bill C-15, the new lobbyists bill. One of the expert witnesses identified that $30 million to $40 million was used by the banks to lobby during that process. That is a lot of money and a lot of investment in terms of the way the government goes about doing business. Putting forward this bill is a good attempt to address some of the crises that we have in our communities, and the banks do have a responsibility and a role to play. If they can spend $30 million to $40 million to lobby public policy, I do not think it is too onerous to have a good debate about it again.

With regard to the summary of the bill, to be specifically clear to constituents, the purpose of the bill is to achieve equity in community reinvestment by providing individuals and businesses with equitable access to credit, and to be very specific, where the unemployment rate is equal to or higher than the national average. That makes reasonable efforts to implement equity in community investments. That is important, because sometimes communities, rural or urban, ebb and flow with regard to a certain stage of development or their length of time as a community. Having banks doing commerce in those areas is very functional for business development.

Being a former member of the City Centre Business Association and Sandwich Business Improvement Association in Windsor, I can tell the House that banks are very important to the whole landscape of the economic development of that community. Their participation on a regular basis is very much appreciated. It is clearly an asset to attracting other businesses. There is no doubt whatsoever about that. We have seen that the closures and some of the consolidations have meant that there has been a price to pay in the general sense.

With regard to the community reinvestment act in the United States, I think there are some interesting points that we should discuss. Its purpose was to encourage federally chartered deposit taking institutions to grant loans to persons living in low and medium income neighbourhoods. It was really a tool to improve the access point for people who are generally denied mortgage loans. Its purpose was also to study mortgage loans granted under the CRA in order to determine their profitability. There is a monitoring process to ensure that there is a win-win situation and to support small lenders. We often talk about small businesses and their important role in the Canadian economy. This is absolutely magnificent. This is an element to be able to get entrepreneurs up and going and to at least give some access to people who would normally be denied the ability to participate or to chase down dreams, people who often become significant contributors in the larger sense as their companies grow.

There was a survey with regard to the American banking system. Six hundred institutions participated, with 98% of the respondents stating that loans granted under the CRA were profitable. That is a 98% return rate. Imagine if we actually got that in our other investments. That is a 2% failure rate. That is absolutely incredible, and we can calculate all the profits and all the improvements stemming from that.

In terms of the advantages that were perceived, respondents surveyed they said they had an improved corporate image in the community, so they are inclusive, they are building relationships, important and trusting relationships. Another advantage is the help for the community to develop and prosper, so there is a long term vision buy-in by the city. There is the creation of a client group for future products and services, so they are very much integrated.

With regard to the effects, what they found is that for Afro-Americans nationwide their actual mortgage loans shot up by 47.5%, so there was a positive correlation there to a situation that they wanted to improve. Mortgage loans granted to Hispanics leaped by 36%. Mortgage loans granted to low and medium income individuals rose by 22%. What is important to note is that in the version they have, there are different categories for the loans: less than $100,000; between $100,000 and $250,000; and over $250,000.

Can we imagine how we could tackle some of our crises in affordable housing with regard to this community if people were actually able to access those loans? In many communities, a loan of $100,000 can buy a home for a decent standard of living within which a family can grow and flourish. I think that is important because we know that we have an affordable housing crisis. We know it is not good for our economy. We know it is not good for Canada.

This is a tool that I think can be profitable for both the banks and the community. I think that is important to recognize. People have a better chance to participate and achieve in a world economy when they have a roof over their head and a sense of security and stability. It could also potentially lead into another boom with regard to housing and would continue a very strong market. I know that in my area we have had a successful housing boom, but it certainly would be nice to see the range around $100,000 or so take off as well. Affordable housing has not really taken off as it should and getting at those targeted individuals would certainly be a benefit.

With regard to whether this is too onerous for the banks or whether it is too costly or the regulations are going to burden them, I do not think that is the case, because we have to look at the fact that 60% of Canadian communities right now have one financial institution to serve them. There really is not a consumer choice there and that is not good. That is almost like a monopoly, because there is predominantly limited exposure for consumer choice. If consumers want to go to something like Internet banking if they are in a setting that only has one, once again, they have to pay for the equipment, pay for the service, pay to do the work and pay a fee. At the same time the bank gets all the rewards of the relationship. That is simply not acceptable in my opinion.

Yesterday, for example, the Royal Bank recorded profits yesterday that are 14% higher than profits in 2001. It reported $2.76 billion in sheer profit. How can that be a hardship? The TD Bank had a record of $2.96 billion at one point and $3 billion in profits. That is generally what is happening right now.

This is a very important bill. I think it is worth debating. What we are talking about is branches working toward equitable community reinvestment and getting branches to analyze their operations, systems and regulations and be inclusive in the community. There are a number of things that will happen after that. Representatives will start to get involved. There will be community capacity building, which will be very popular.

To indicate my sincerity with regard to the merits of this case, in Windsor West right now the unemployment rate falls below the national average. I could see the benefits of this but I would not necessarily receive them. I think all of Canada should look at this because we are certainly going to have some improvements.

Banking ActPrivate Members' Business

6:10 p.m.

Canadian Alliance

Inky Mark Canadian Alliance Dauphin—Swan River, MB

Madam Speaker, I am pleased to take part in the debate on Bill C-229. I begin by congratulating the member for Hochelaga—Maisonneuve on his persistence. Initially Bill C-229 was Bill C-289 and then Bill C-428.

The bill amends the Bank Act. It provides that certain branches of a bank must take measures to facilitate access to credit to persons who have a residence or a place of business located in an electoral district where the monthly unemployment rate as established by Statistics Canada has been on at least one occasion during the preceding calendar year equal to or higher than the national average.

Furthermore, the bill provides that certain banks must pay 5% of their profits in certain years into a special fund that would be used to lend to people in districts that qualify.

Also, it provides that certain bank representatives under threat of a $50,000 fine must meet with community representatives to discuss implementation measures adopted or associated with community investment.

As well, certain banks are to keep statistics on to whom they lend money and they are to prepare an annual report providing information relating to the community reinvestment initiative. In other words, there are requirements on how the banks operate if these amendments are made to the Bank Act.

Equity in community banking is very important. Reinvestment in the community certainly does help attain the balance needed between local residents and their banks. It is important for financial institutions to meet the local community's credit needs in the form of loans granted to individuals, businesses and community organizations.

The principles espoused by the bill are indeed laudable. The overall goal of achieving equity through community reinvestment by encouraging banks to grant loans to persons living in areas having above average unemployment, by studying the loans granted under the act through a reporting system and showing support to small borrowers within the community is a commendable goal to aspire to.

As previously mentioned, making credit more readily available to areas that for one reason or another may be disadvantaged at a particular time is certainly a worthy cause. This is indeed what the U.S. did when it passed the community reinvestment act.

It is also worthy to note that in the housing sector, the U.S. saw improvements. Since 1993 mortgage loans to Afro-Americans have gone up 47.5%. Mortgages granted to Hispanics have gone up 36%. Mortgages given to low to mid-income earners have risen 22%. These are all excellent statistics.

However, one must be careful before adopting any type of wholesale changes to the Canadian legal system and regime. This is what the bill does. It seeks a U.S. style approach to achieve community equity reinvestment by adopting the U.S. community reinvestment act. Sometimes U.S. style reforms may be good or even welcomed, but one must be cautious of exactly what reforms Canadian amendments attempt to adopt.

As noted, the bill is modelled after the U.S. community reinvestment act. However, the community reinvestment act really is an omnibus bill. A major portion of the U.S. bill that brought in the community reinvestment act also amended the housing and community development act of 1974. Perhaps more important, it extended the urban homes program. The United States at the time was suffering from a substantial crisis in urban decay.

Jointly, the community reinvestment act, the housing and community development act and the urban housing program all combined to produce the increased mortgage numbers.

Obtaining statistics like that is something that can be aspired to, but all the legislative tools have to be in place, not just one or two of them.

When we bake a cake we need all the ingredients. We cannot leave out the flour or the sugar and expect the cake to look like the baker's down the street. However, Bill C-229 in proposing the amendment to the Bank Act may not produce the intended results that were indeed attained in the U.S. because it has left out some of the ingredients.

The real estate and financial service sectors in Canada are vastly different from those in the U.S. The regime involved in the chartering of banks is different. The real estate industry is different. There are different players involved in Canada.

I realize that this amendment is not votable, however, if it were, the proposed legislation would need a little more work done to it. For instance, the legislation would have to be explicit if it was intended to facilitate just business growth or would homeownership through mortgages like the U.S. also be targeted? If granting mortgages was an intended result, then obviously the Canada Mortgage and Housing Corporation would play a role.

Leaving the mortgage aspect aside, I note that this is the third time the bill has been before the House. As I mentioned earlier, it has a very good goal in mind. However, if it comes to the House a fourth time, there may be some utility in dissecting not only the U.S. community reinvestment act, but also the housing and community development act and the urban housing program to see if any of the provisions found there might be helpful to Canada.

Finally, there are two brief comments that should be made about the bill as a whole. First, in a time when governments should be trying to reduce regulatory red tape and bureaucratic stifling, the bill seems to add a few more components to the already highly regulated banking sector. Meetings must occur and reports must be written with 13 or more components by bank representatives. These reports must be given to the superintendent. The superintendent must give the reports to the minister. The minister must lay the reports before each House of Parliament.

Sometimes reports and meetings are not needed but it is not to say reports would not be needed in these types of situations if this bill were ever passed. However, if legislation of this type were ever votable, then care must be taken to ensure that the statutorily dictated meetings and reports were properly administered.

The last point deals with the offences and penalties section under subsection 627.16 and 627.17.

If requested, the branch of a bank must meet with community representatives who have requested a consultation concerning the assistance the bank is giving to community reinvestment and any implementation measures developed or undertaken by the bank to achieve that reinvestment.

Paragraph 627.16(2) says that any person, and it is assumed that any person means the bank even though it does not say so explicitly, who does not meet, if requested, is liable to a fine not exceeding $50,000. Also, banks could receive $5,000 fines if they do not comply with the reporting requirements. Yet if the banks violate subsection 627.4, which states that the bank shall implement equity community reinvestment, no offence will have been committed.

Therefore, at the end of the day we have this legislation that statutorily directs meetings with community representatives and directs that reports must be written outlining the banks reinvestment strategy, both under threat of substantial fines. However there is no obligation for the banks to actually implement community reinvestment. There is a $5,000 fine for not writing the report that says they did not undertake any community reinvestment measures.

In closing, this might not be the most helpful way to ensure that community reinvestment gets accomplished. As stated before, the goals of the bill are commendable but the drafters have not reasoned it out to the point where it could be seriously adopted in the House.

Banking ActPrivate Members' Business

6:20 p.m.


Larry Bagnell Liberal Yukon, YT

Madam Speaker, the parliamentary secretary was very articulate and I agree with everything he said.

I would like to go on the record by saying that I have supported business for most of my career. In my riding, a very rural riding, there have been problems over the years with banks providing credit to businesses in very rural and remote areas. I hope they will continue to work toward alleviating that problem, which I thought was disappearing, but recently there seems to be less appetite for providing credit to tourism operations. With low metal prices and post-September 11, this is very critical for my constituency. I hope they will take that into consideration and continue to provide credit for the tourism industry, which is so important to my riding.

Banking ActPrivate Members' Business

6:20 p.m.


Réal Ménard Bloc Hochelaga—Maisonneuve, QC

Madam Speaker, at the end, I would appreciate it if you would ask for consent to make this bill votable. I think you will find consent.

I thank the hon. members who took part in the debate, but a there were a number of pieces of misinformation. First, a bank is not a private enterprise, to the extent that we, as parliamentarians, vote supply for the operation of the Canada Deposit Insurance Corporation. It is important to know that, when a bank grants a loan, the risk factor is virtually nil because, according to the Superintendent of Financial Institutions, 90% of loans come under the Canada Deposit Insurance Corporation.

Second, I think parliamentarians must recognize that banks do not operate in underprivileged communities. It is not all charity. Our colleague from Prince George—Bulkley Valley said that banks in his riding were involved in the community. That may be, but the problem is that banks do not operate in underprivileged communities. That is great if they are involved in middle-class and upper-middle class communities, but they are non-existent in underprivileged communities.

Third, I thought for a moment that I was watching an episode of The Flintstones , so rock solid was the bias being conveyed. Contrary to what the parliamentary secretary said, the bill does not tell banks they have to grant loans to people if they are insolvent. The bill provides that they will assess loans and how to reinvest in their community. That is what community reinvestment is all about.

This is a reality that works for the United States, and I do not see why it could not be considered for Hochelaga—Maisonneuve and other ridings. We must not put words in the bill's mouth, so to speak. I think that our colleague from the NDP, the hon. member for Windsor West, has understood very well the essence of the bill.

Again, I think that we would be shirking our responsibilities, as parliamentarians, if we tried to ignore this issue. It is true that this is not a recommendation in the MacKay report. However, the fact that it was not mentioned in the report does not mean it would not be worthwhile.

In the early nineties, how many members were opposed to an employment equity act? Banks did not want such an act. Yet, the requirements are the same. They must determine the number of women, the number of members of minorities, the positions held, the salaries. If we let the market operate on its own, it is impossible to have greater equity, to have banks more involved in poor communities.

Yet, the Employment Equity Act did not result in banks having to shut down because they could not make it.

I could provide an example relating to social economy. In Quebec, there is an area about which the hon. member for Yukon said “Banks do not want to get involved in the recreation and tourism industry”. This is also true in large cities such as Montreal. Social economy is based on the firm belief that capital money can be used in areas that are neglected by conventional money.

In Quebec, for example, we created a whole support network for the elderly, that is home support services, which are part of the social economy. I clearly remember how, at the beginning, the doomsayers would say, “This is not possible, it will not work. Cooperatives cannot do that. If one cares about the social dimension, one cannot be a good manager”. Yet, after a few years, we are finding out that it is possible to have social concerns and, at the same time, be a good manager.

Perhaps the bill can be improved, as the Conservative member said, but I am asking all hon. members to start from the premise that we can work together on it, I am asking that it be referred to the committee and that each political party propose amendments that will make this better legislation.

I cannot imagine how horrible it would be for this bill to die on the Order Paper now, considering that it is before us for the third time and that all parliamentarians agree that banks behave in a reprehensible fashion in their communities.

Banking ActPrivate Members' Business

6:25 p.m.

The Acting Speaker (Ms. Bakopanos)

Do you want to ask for unanimous consent?

Banking ActPrivate Members' Business

6:25 p.m.


Réal Ménard Bloc Hochelaga—Maisonneuve, QC

Madam Speaker, at the beginning of my speech, I asked you to see whether there is unanimous consent of the House to make this motion votable. If you were to ask for it, I think we would have it.

Banking ActPrivate Members' Business

6:25 p.m.

The Acting Speaker (Ms. Bakopanos)

Is there unanimous consent of the House to make the motion votable?

Banking ActPrivate Members' Business

6:25 p.m.

Some hon. members


Banking ActPrivate Members' Business

6:25 p.m.

Some hon. members


Banking ActPrivate Members' Business

6:25 p.m.

The Acting Speaker (Ms. Bakopanos)

The time provided for consideration of private members' business is deemed to have expired. Since this is not a votable motion, the order is dropped from Order Paper.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

Banking ActAdjournment Proceedings

6:25 p.m.


Charles Caccia Liberal Davenport, ON

Madam Speaker, let me introduce this topic by saying that over the years, and despite repeated requests, the government has not conducted an environmental assessment of the aquaculture industry. An examination of whether or not it is advisable to use public funds in support of current practices in aquaculture has never been undertaken or debated in this Parliament.

Numerous parliamentary and non-governmental reports support this view. For instance, in February 2001 the Auditor General found that the Department of Fisheries and Oceans was not fully meeting its legislative obligations under the Fisheries Act while participating in the regulation of salmon farming in British Columbia. The Auditor General outlined steps to correct the situation. So far, no action has taken place.

In June of last year the Senate committee on fisheries released its report entitled “Aquaculture in Canada's Atlantic and Pacific Regions” recommending a thorough consultation with all users of aquatic resources before further development of the industry is allowed. Again there has been no action.

Then we have the Leggatt report released in November of last year. Its recommendations include the removal of all net-cage salmon farms from the sea by January 1, 2005, and a moratorium, which actually was recently lifted by the B.C. government, on new farm sites.

In addition, the Leggatt report recommends to remove the promotion of aquaculture from the Department of Fisheries and Oceans, to improve monitoring and to regulate salmon farming by federal government regulators. These recommendations have not been implemented so far.

Tonight I would appreciate it if the Parliamentary Secretary to the Minister of Fisheries and Oceans would answer the following questions.

First, when will the government conduct a full environmental assessment of the aquaculture industry and the provisions of the Canadian Environmental Assessment Act?

Second, when will the recommendations of the Auditor General be implemented?

Third, when will the government terminate bad practices in fish farming such as allowing sewage from farms to pollute surrounding waters and allowing the escape of farmed fish, which deplete the native wild fish?

Fourth, when will the government act on the devastating economic, social and environmental impacts caused by the aquaculture industry on first nation communities living along Canada's coasts?

Banking ActAdjournment Proceedings

6:30 p.m.

Bonaventure—Gaspé—Îles-De-La-Madeleine—Pabok Québec


Georges Farrah LiberalParliamentary Secretary to the Minister of Fisheries and Oceans

Madam Speaker, I am very pleased to rise tonight in the House to respond to the motion moved by the hon. member for Davenport. I thank him for his continued interest in aquaculture and in all environmental issues.

This issue is a priority for the Department of Fisheries and Oceans. The program for sustainable aquaculture, announced in 2000, is an investment that will not only allow the aquaculture industry to grow and become a vital component of the Canadian economy, but it will also allow the government to ensure that this growth does not come at the detriment of our aquatic ecosystems.

Aquaculture is an increasingly important activity, in Canada and around the world. It provides numerous social and economic opportunities.

In the last ten years, the department has established a certain number of initiatives to promote the sustainable development of this promising industry. Since the Program for Sustainable Aquaculture was launched, the department has stepped up its efforts to meet its objective.

I would also like to mention that the Standing Committee on Fisheries and Oceans has, in recent years, demonstrated a great deal of interest in the sector, in terms of its effects on the environment, and its future, from both a social and economic standpoint.

A number of studies on aquaculture have been carried out to date. Despite its relative youth, the aquaculture industry has been the subject of a number of rigorous studies and reviews over the past ten years. These studies and reviews have shown that when properly managed, the impact of aquaculture on the environment is minimal.

The Department of Fisheries and Oceans is carefully considering all of these results in order to ensure that the measures implemented today take into account all that we have learned up to this point.

The aquaculture industry is a viable industry that continues to improve its practices. Despite this positive fact, we must continue to better understand the effects of aquaculture on the environment and take measures to improve the confidence of the public in this industry.

Given the extraordinary opportunities that aquaculture provides us with, we must also take appropriate measures to make the industry more competitive on world markets. To this end, DFO has adopted a detailed action plan to support the sustainable development of aquaculture.

I would now like to talk about some of the key features of this plan.

First, let us address the issue of environmental assessment. The department adopted a series of measures to better regulate the industry and ensure the sustainable development of Canada's aquaculture industry.

As Parliamentary Secretary to the Minister of Fisheries and Oceans, I want to stress the fact that the department has always maintained that it must, on the one hand, make sure the industry has all the tools it needs to play an important part in rural development and, on the other, put in place all the audit and monitoring mechanisms necessary to increase Canadians' confidence in the sustainability of the industry.

With respect to effective monitoring of the industry, the government's role is not only to improve the legislation and regulations pertaining to aquaculture. The department is also trying to find ways to better monitor the activities of the industry on a day-to-day basis.

In cooperation with the provinces, the department is reviewing provincial methods of monitoring aquaculture activities. We want to continue to work in close consultation with the provinces to improve these methods and strengthen them if need be.

Let us talk about cooperation. Since aquaculture and environment issues come under the jurisdiction of both the federal government and the provinces, the department is working closely with provincial and territorial governments. This cooperation is taking place under the auspices of the Canadian Council of Fisheries and Aquaculture Ministers and is producing very good results.

Thanks to the council, DFO and the provinces can ensure consistent management of the aquaculture industry all over the country. This prevents the duplication of efforts and resources that are saved can serve other important purposes such as research and environmental protection.

In conclusion, given all the work--

Banking ActAdjournment Proceedings

6:30 p.m.

The Acting Speaker (Ms. Bakopanos)

I am sorry to interrupt the hon. parliamentary secretary, but his time has run out. The hon. member for Davenport.

Banking ActAdjournment Proceedings

6:30 p.m.


Charles Caccia Liberal Davenport, ON

Madam Speaker, I want to thank the parliamentary secretary for his elaborate and extensive reply, for his frequent references to the term sustainable development, and the fact that it would appear that his department is applying the basic principles at least theoretically.

The question as to whether the government would conduct a full environmental assessment of the aquaculture industry remains unanswered. The question as to whether the government would implement the recommendations of the Auditor General remains unanswered. The question as to when the government would terminate certain bad practices which I outlined in my brief intervention remains unanswered. Finally and very important, when would the government act on behalf of the first nation communities living along Canada's coasts--

Banking ActAdjournment Proceedings

6:35 p.m.

The Acting Speaker (Ms. Bakopanos)

The hon. Parliamentary Secretary to the Minister of Fisheries and Oceans.