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House of Commons Hansard #93 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was bank.

Topics

Standing Committee on Agriculture and Agri-Food--Speaker's RulingPrivilegeGovernment Orders

3:40 p.m.

Liberal

The Speaker Liberal Peter Milliken

I am now prepared to rule on the question of privilege raised by the hon. member for Malpeque on November 28, 2006, concerning the alleged intimidation of witnesses before the Standing Committee on Agriculture and Agri-Food.

I would like to thank the hon. member for Malpeque for raising this important issue, as well as the hon. Minister of Agriculture and Agri-Food and the hon. member for Wascana for their comments.

In raising this question of privilege, the member for Malpeque alleged that the Minister of Agriculture and Agri-Food intended to intimidate witnesses scheduled to appear before the agriculture and agri-food committee. He argued that the intimidation of witnesses constitutes a contempt of the House.

The minister, in his reply, indicated that while the government had made clear its views on how the Canadian Wheat Board should conduct itself, he had no intention of interfering with the rights of Wheat Board directors to express themselves before the committee or anywhere else. In response to a concern raised by the member for Wascana, the minister indicated that this position applied to officials employed by the Wheat Board as well.

I indicated at that time that I was unsure that sufficient grounds existed for the finding of a prima facie breach of privilege, but undertook to look into the matter.

Having now done so, I first wish to point out that the issue of intimidating witnesses who appear or are to appear before a committee of this House is a very serious matter, and members, particularly the hon. member for Malpeque, are to be commended for exercising vigilance in this regard.

House of Commons Procedure and Practice, at page 862, states:

Witnesses appearing before committees enjoy the same freedom of speech and protection from arrest and molestation as do Members of Parliament.

It continues on page 863:

Tampering with a witness or in any way attempting to deter a witness from giving evidence at a committee meeting may constitute a breach of privilege.

In light of this, I have carefully reviewed the exchanges on this matter. In his answers during oral questions and in his responses when the present question of privilege was raised, the minister has consistently denied interfering with the potential witnesses in any way. As Speaker, I accept that. In the present case, it is clear that the member for Malpeque and the Minister of Agriculture and Agri-Food disagree about the significance of the answers provided by the minister during oral questions. In the circumstances, in the view of the Chair, that is a topic properly dealt with as a matter of debate or during exchanges during oral questions.

With regard to concerns about the actual appearance of the witnesses before the agriculture and agri-food committee, it will be up to the committee to examine such concerns in due course and take the action it judges appropriate. At the present time, based on the arguments presented, the Chair hesitates to intervene in the matter.

As the House of Commons Procedure and Practice indicates on page 128, and I quote:

Speakers have consistently ruled that, except in the most extreme situations, they will only hear questions of privilege arising from committee proceedings upon presentation of a report from the committee which directly deals with the matter and not as a question of privilege raised by an individual member.

For the reasons stated above, I must rule that the issue raised by the member for Malpeque does not constitute a question of privilege.

I thank the hon. members for their comments on the matter.

The House resumed consideration of the motion that Bill C-37, An Act to amend the law governing financial institutions and to provide for related and consequential matters, be read the second time and referred to a committee.

Bank ActGovernment Orders

3:45 p.m.

NDP

Olivia Chow NDP Trinity—Spadina, ON

Mr. Speaker, I rise before you to speak on behalf of Canada's banks. Yes, that is right, I am empowered to speak on their behalf. I am in fact their member of Parliament. Canada's major banks and most of the insurance companies all have their dazzling, beautiful towers in my riding of Trinity—Spadina. So does the Toronto Stock Exchange, at the fabled intersection of King and Bay.

I am their member of Parliament, so I must speak up on their behalf.

Technically they are not citizens and do not have a vote, although they have certainly bought plenty of influence with the government over the years. They have poured, I am told, thousands of dollars into the coffers of the Liberals and the Conservatives, though none to the NDP, I must admit, and none to my campaign in the last election.

However, I am fair. I represent every constituent. The banks are constituents. If we read their annual reports and corporate responsibility statements, we see that they all claim to want to be good corporate citizens. I am here to plead on their behalf, to encourage members to help them to be good corporate citizens, to consider the bank act amendments as a golden opportunity to help the banks come to terms with their role and to help further the role of government in fostering a healthy economy and economic opportunity, prosperity and security for every single Canadian.

That is what the banks say they want, so let us help them. Let us show them how they can do a better job and enshrine the right regulations in legislation to keep them from going astray of their ideals. Let us ensure they are guided to make the best possible investments, and investments in Canada, not in offshore tax havens.

Let us ensure that we protect the sovereignty of the financial system that is so important to our independence and role in the world. That would be good citizenship.

The banks have grown and prospered. Surely citizenship demands reinvestment in every geographic region, community and sector, and for all Canadians, regardless of income level.

My colleague, the hon. member for Winnipeg North, has already pointed to the problems in many communities. They have been abandoned by the big banks. They are denied fair and equal access to banking services. This is the result of mergers. We need to protect against this and help banks fulfill their duties as corporate citizens.

Bank charters provide a protected privilege, but Canadians are owed something for this privilege. Let us ensure availability and access. Banks used to pride themselves on the fact that it costs the same for services in Yellowknife as it does at King and Bay. My constituents demand it. Let us ensure that bank profits are fair and fairly taxed. That would help.

Let us look at credit card rates. As I said earlier, this bill is an opportunity for renewal and change in the way banks work with Canadians. Canadians, particularly low income Canadians, are gouged daily by ridiculously high credit card interest rates. The gap between the prime lending rate and the rate most credit cards charge has never been bigger. It is time to cap credit card interest rates to five points above the prime rate. Five points is quite a lot.

The prime rate today sits around 6%. At the same time, the banks are charging upward of 18% to 19% for credit card interest. It is time to reduce the interest paid on the almost $44 billion in credit card debt owed by average Canadians. That is right: $44 billion. That is higher than Brian Mulroney's record federal deficit in 1992-93. I would like everyone to remember that. A $44 billion debt is carried by average Canadians because of huge credit card interest rates.

The Liberals refused to protect consumers from outlandishly high credit card rates. They argued that there were lower credit card rates available elsewhere. However, far too often, lower income people who have poor credit ratings cannot qualify for these lower interest cards. This is the time for the government to take real action to protect average working families from high interest rates and real action to improve our national economy by improving the disposable income of average Canadians.

There is simply no justification for maintaining high credit card interest rates during this period of steady and declining interest rates, thus making the need to cap credit card rates at 5% above prime a necessity today.

I also want to speak about affordable housing and mortgage insurance, which is also part of Bill C-37. I noticed that deep within this bill are amendments to the National Housing Act, the act that legislates the Canada Mortgage and Housing Corporation.

The former prime minister, as part of his government-wide commercialization initiatives in the 1990s, steered through some amendments to the National Housing Act in 1998 that were widely opposed by affordable housing advocates and cities.

Those amendments limited the role of CMHC in working with municipalities and community based housing providers in developing innovative new ways to create desperately needed new affordable homes, while at the same time opening the CMHC mortgage insurance business to the private sector.

Mortgage insurance has been very lucrative as Canada's housing market has been secure for the most part. Because of the Liberal era restrictions on CMHC, the housing corporation has been generating huge surpluses without being able to spend those on new affordable homes. In fact, we know the surplus to be $5 billion. Basically, it is taking this money, billions of dollars in premiums, and paying out almost nothing. We know that affordable homes are desperately needed in cities across Canada.

What this bill does is further commercialize or privatize CMHC. That includes opening mortgage insurance business to even more private sector businesses. The problem with this is that it cuts into the lucrative and desperately needed revenue stream for CMHC. This stands, even though it has not been able to invest this revenue, which makes it almost impossible for CMHC to gain any more future dollars.

The current amendments appear to seek to further privatize CMHC, and we must oppose that. CMHC has made a lot of money in recent years and has been providing good service at a reasonable cost and every bit as efficient as the private sector. There is no reason that CMHC should be squeezed out or forced to share this business at all.

We should be able take the funds that are in CMHC and use those funds to build more affordable housing. It is good for our economy and it is good for Canada. We know that we need to invest and we need to change the previous Liberal government policy and allow CMHC to invest a portion of its mortgage insurance earnings into building affordable homes.

We heard earlier today that the affordable housing crisis is something that brings our country together. We are in a desperate situation and we must build affordable housing. We are seeing increased homelessness, massive housing insecurity and substandard housing which, in turn, is leading to a heavy burden on individuals and massive disruptions of communities and local economies and increased costs for government.

We also need to look into small business lending, at service charges and at huge profitability and ask if it might be time to look at the concentration in the financial district, a district that graces my riding. We also need to look at employment, as well as at the loan shops that are popping up in poor neighbourhoods. We need to look at all of those things.

We need to address the act and give it a total overhaul for the good of my bank constituents, for Canadians and for the country. We have the opportunity right now with Bill C-37 to reform the Bank Act and we should take this opportunity. We should not just tinker with the Bank Act. We need to reshape it to reflect current realities and future opportunities right here and now in Canada.

Bank ActGovernment Orders

3:55 p.m.

NDP

Alexa McDonough NDP Halifax, NS

Mr. Speaker, as I make a few very brief comments on Bill C-37, An Act to amend the law governing financial institutions and to provide for related and consequential matters, I want to congratulate my colleague, the member for Trinity—Spadina, who just pointed out some of the consequential matters that arise in relation to the proposed changes that the government has placed before the House of Commons.

I particularly want to commend her for drawing attention to the implications for affordable housing, which we desperately lack, in the bill that is before us, following on the appalling record of the previous Liberal government in having basically pulled the plug on any federal commitment to affordable housing.

I wonder if I might ask the member for Trinity—Spadina if she could explain, in perhaps a little bit more detail, what the implications are of the changes to the National Housing Act that will make the likelihood of affordable housing being made available to those fantastic numbers of people who are currently in crisis even less available to them than it is now.

Bank ActGovernment Orders

3:55 p.m.

NDP

Olivia Chow NDP Trinity—Spadina, ON

Mr. Speaker, Bill C-37 is squeezing CMHC out. CMHC is being forced to share this business.

If that happens, it means that CMHC will not continue to garner the money as it has been collecting in the last few years. It means that it will not have a large reserve fund. It also means that CMHC will not have the funds it needs to assist a lot of the co-operatives or social housing units that are now quite old and need repair and maintenance. These housing co-ops, these existing affordable housing units need the funds from CMHC to assist in maintaining their buildings. If CMHC does not assist, then some of these co-operatives and some of these affordable housing units may end up going bankrupt and, therefore, we would be shutting down on some of these affordable housing units.

If CMHC has no funding left because of the privatization that is in front of us, it will not be able to provide funds to assist some of these co-operatives that are now in need of taking more funds to subsidize some of the tenants. The tenants need quite a bit of subsidies as they cannot pay market rents. If the tenants were asked to pay market rents, they would not be able to afford some of these co-operatives. The co-operatives are looking to CMHC to fix the section 95 question but for CMHC to be able to do that it needs a pool of money.

As I said earlier, CMHC does have $5 billion at this point but it needs to spend those funds to help build affordable housing, to assist co-ops, to bring in more subsidized units and to maintain and repair some of the older cooperatives.

All of that is required and that is what we need to do, which is why I believe we should strike out the part in this bill that would commercialize or privatize CMHC.

Bank ActGovernment Orders

4 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, the member raised a certain aspect of the bill that relates to housing, an area in which I have some experience having served on the board of the Peel Regional Housing Authority for some time.

She also spoke about Canada Mortgage and Housing. I know we have had this discussion in a private member's bill that was recently before the House with regard to the accumulated surplus that CMHC has had. It is a very large number.

It is important for members to understand a little bit about CMHC but I will not have the time in a question. However, effectively, it relates to the same kind of principle that general insurance companies have. They must have sufficient reserve funds, through investment or whatever it would be, to have the coverage ratio necessary to meet the risk of loss, and CMHC is no different. It is not a matter that we can just simply take the resources that are there to provide the security that allows CMHC to provide the services that it does.

I would just ask the hon. member if she would maybe come to an understanding that CMHC does not have a surplus because it just wants to hoard cash, but that it is jurisdictionally and legally obligated to maintain coverage ratios. I do not know if she understands that concept, but there are coverage ratios that must be in place.

It is really important and appropriate in the House not to suggest that somehow the surplus is discretionary and can be invested elsewhere. I would encourage the member to ensure we get that straight so Canadians do not assume somehow that CMHC is hoarding cash.

Bank ActGovernment Orders

4 p.m.

NDP

Olivia Chow NDP Trinity—Spadina, ON

Actually, Mr. Speaker, I do know that quite well because I remember opposing the amendments to the National Housing Act in 1998 that were put through by the former prime minister. Why did I oppose them? I opposed them because they concerned the commercialization of CMHC.

On the cover ratio, CMHC has $5 billion in its reserve fund. Surely it does not need $5 billion in the coverage ratio. The surplus has grown tremendously. Even if we take one-fifth of it, or 20% of it, we could use those funds to start creating some affordable housing.

The amendments that were put through in 1998 in the National Housing Act limited the role of CMHC in working with municipalities and community based housing providers, which prevented them from developing innovative new ways to create desperately needed affordable housing. At the same time, the amendments opened CMHC's mortgage insurance business to the private sector, which is what it is doing now.

What was started with the former prime minister is now being continued, and both of those trends are very bad trends.

In other countries around the world, their equivalent of CMHC provides that kind of bases. Every time mortgage interest rates go down, they take the money that is gained from that lower interest rate and reinvest it into building new affordable housing.

It has been done in Hong Kong, in Britain and in many parts of the world. It is only in Canada that we have a very reactive and negative way of dealing with CMHC. As a result, very few affordable houses were built after 1994-95 when the national housing program was cancelled.

I lament the complete walking away of the government from its responsibility of building affordable housing. It started with the former prime minister, Mr. Mulroney, and later on the former Liberal prime minister continued that trend and continued to cancel the national housing program.

Bank ActGovernment Orders

4:05 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I am pleased to participate in the debate on Bill C-37. I found it very difficult to deal with the bill. First, the bill in itself is probably one of the larger bills I have ever seen in this place. It is some 237 pages long.

It is an omnibus bill of sorts, which means it provides a variety of amendments, technical and otherwise, to a wide range of bills. When people read the bill, they cannot understand what the provisions in it mean unless they have the bill to be amended beside them so they can see the provisions that are already in place and understand the context in which they relate to that bill.

I know the members know, but Canadians should know that when we get bills such as this, members, who are involved in the finance committee, have to rely on the work and due diligence of others to make absolutely sure the provisions are there. In fact, it is probably the most extreme example that I could cite.

I have a problem with the bill because it covers so many things. I suspect that if any government ever wanted to do anything to amend certain acts, this certainly would be the way to do it, to put through a bill in excess of some 230 pages, which affects maybe 20 or 30 different existing pieces of legislation.

In order to give people an idea, the summary to Bill C-37 indicates that it is an enactment that amends a number of acts governing financial institutions. At least it is in a pocket that we understand.

The bill also amends legislation related to the regulation of financial institutions. This place has been seized over the years with legislation related to financial institutions, particularly as it relates to bank mergers and the lines of business banks can get into. I must admit it conjures up some memories of clichés that some members would use in their speeches during some of the debates about banks being terribly bad. However, most people would say that their bank branches are pretty good.

The notable pieces of legislation that are being amended are the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act and the Trust and Loan Companies Act. All of the amendments are aimed at achieving three objectives: first, enhancing the interests of consumers; second, increasing legislative and regulatory efficiency; and third, adapting those acts to new developments. These sound a little comprehensive, but they are envelopes under which these particular amendments could be placed. There are also amendments to the Bills of Exchange Act to provide for the introduction of electronic cheque imaging.

There are also technical amendments, which cover a broad range of acts: the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act, and I could go on. There are at least 20 of them.

I think maybe I have made my point, that ordinary members of Parliament, who are not involved in the finance committee and maybe do not have some of the background and training, will have a very difficult time. A number of votes are taken on bills like this, whether it be at second reading, committee stage amendments, report stage, third reading. I think Canadians will ask themselves this. If this is so cumbersome, if there are 230-some odd pages, if there are virtually hundreds and hundreds of amendments to dozens of acts, how can a member of Parliament, with all the responsibilities, make an informed decision and cast a vote reflective of the due diligence that has been done?

How that happens here is probably the same way it happens in real life.

I can recall being the vice-chairman of the board of the Mississauga Hospital. Under the Ontario hospitals act, the board of directors is responsible for every aspect of the administration and operation of the hospital.

I remember giving a seminar on trustees of hospitals. As I recall, the title was “Hospital Trustee: Mission Impossible”. It is impossible because we can not possibly expect volunteer members of a board of directors to be fully informed about the day to day activities of the hospital, to take full responsibilities for what the doctors, nurses and administrative people do and, if anything goes wrong, to be personally responsible for those.

What happens is the responsibilities of the board are seconded or delegated to other persons. Therefore, for the board's responsibilities, as is the case for members of Parliament, there is a delegation or a secondment of those responsibilities to others who specifically spend their time on them. They perhaps have the specific expertise and the support personnel, either within their offices or from parliamentary offices, to do the necessary due diligence, to do the checking, to ask the questions, to hear witnesses and to make some ascertainment as to the propriety of the amendments being made.

We have in this chamber always the presumption of honesty. We certainly have that as well in our committees as we bring witnesses forward. It is a process which the members of Parliament rely on their best judgment to ascertain that witnesses who appear before the committee are appropriate witnesses, that they cover the necessary areas and that they get the proper representations from the departmental officials who are responsible for having drafted this.

We also have the support of the Library of Parliament, which does some excellent legislative summaries to the extent that it can. In this regard, I suspect the legislative summary for a bill this size might very well be five times larger, maybe about 1,000 pages, but we have the resources available to us of the Library of Parliament to assist us in specific areas.

It is an onerous task. I do not purport to be fully knowledgeable and able to come here and argue the case of why members should vote for a particular clause in a particular bill that is to be amended, whether it be technical or otherwise. However, the job does get done and it gets done through a process of secondment, provided the committee is doing its work and provided the officials have done their work.

I must admit Canadians should be assured, and I wish they would get a better chance to see it, that the work done in committee is probably the most productive work that members of Parliament do. The work in committees is excellent. The quality and level of questioning of witnesses is excellent in terms of discharging the responsibility of due diligence or doing the detail with regard to the legislation before this place.

Being a legislator is an important responsibility. One of the things that I note in the bill is right at the very end. It is coincidental, but I just gave a speech a couple of days ago on a private member's bill that had to do with repealing acts that had received royal assent. They had gone through the entire legislative process of being tabled at first reading, debated at second, went to committee, committee stage amendments, report stage amendments back to the House, third reading, passed on to the other place and then went through an almost identical process and then received royal assent.

The public would think that when the bill receives royal asset it is law. It is not law until it is proclaimed. It must be in force.

The private member's bill I referred to was started in the Senate by Senator Tommy Banks. It was the third iteration of a bill that has been around since about 2002. It has to do with repealing legislation that has received royal assent but has not been proclaimed and put into force, and therefore is not active law in Canada.

I note the final provision of the bill found on page 237 entitled, “Order in Council” under the subtitle of “Coming Into Force”. It reads:

The provisions of this Act, or the provisions of any Act enacted by this Act, come into force on a day or days to be fixed by order of the Governor in Council.

This appears from time to time in bills. It means there is no set date as to when the provisions of this bill will be put into place. Often that happens because other things must occur before the provisions of the amendments within the bill could be operative. It is almost like once we pass this, before we put it in force, certain other things have to happen. Once they have happened, then the governor in council, which is basically the cabinet, sets a date fixing that certain provisions of this act would come into force.

As an aside, in most of the cases bills would generally say that the act would come into force on the date on which it received royal assent. That is fairly straightforward. There are others which have provisos that the in force date will be on a specified date, for instance, January 1, 2007.

In the reproductive technologies bill, I believe there two key areas. One is called prohibited acts under the bill. The other is controlled activities. The prohibited acts were all in force on royal assent. The controlled activities were subject to being in force by a date set by order in council. The reason for that was the controlled activities required the establishment of a board of management that would do certain things. Until that was set up, the provisions of that could not go forward.

Another example is Bill C-11 from the last Parliament, the whistleblower legislation. This legislation received royal assent in November of last year. The legislation provides protection to civil servants who have allegations of wrongdoing within the public service or anybody who is within the definition of a public servant. The bill is not in force yet.

In this Parliament we have Bill C-2, and this can get complicated in non-financial bills. Bill C-2 prescribes amendments to Bill C-11.

Bank ActGovernment Orders

4:15 p.m.

Conservative

John Baird Conservative Ottawa West—Nepean, ON

It just passed the Senate.

Bank ActGovernment Orders

4:15 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

I am advised by the President of the Treasury Board that it just passed the Senate. That is good news for everybody because the House unanimously supported the accountability act. There were some loose ends to be tidied up.

Bill C-2 has to come back to the House. As long as everyone is happy and this place can live with the compromises, it will pass. I will reserve judgment on that until I see the documents. It is like doubting Thomas.

Bank ActGovernment Orders

4:15 p.m.

Conservative

John Baird Conservative Ottawa West—Nepean, ON

You are going to like it.

Bank ActGovernment Orders

4:15 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

That is a good thing. The President of the Treasury Board is a trusting person, I am sure.

As I said, some amendments in Bill C-2 of this Parliament amend a bill that was passed in the last Parliament, which has not been put into force yet. It is kind of reverse order. One would think that Bill C-11 would be in place and then Bill C-2 would be passed.

I could talk for some time about Bill C-11 and why it would have been important to have it in place because there is so much work to do before it gets up to speed and is operating efficiently. We could have had more accountability within the public service and the Government of Canada had it been in force when the Conservative Party took office. However, that is the Conservatives' choice. I do not think they really wanted to have too many people with the protection to blow the whistle on a government that was not doing things properly.

Before Bill C-2 gets royal assent and comes into force, Bill C-11 must be proclaimed. Because Bill C-2 amends Bill C-11, Bill C-11 must exist in law before Bill C-2 can be proclaimed.

I am glad to hear that Bill C-2 is now in the last stages of becoming law and is ready to receive the go ahead in terms of coming into force, which means that Bill C-11 also would be proclaimed and be in force. We will see the beginning of the establishment of the human infrastructure of an effective accountability mechanism and protection for our public servants.

I thought it was important to raise with members that we are now considering a bill which has a very large number of amendments. Today in the Standing Joint Committee on Scrutiny of Regulations which I chair, we addressed an issue where a regulation has been bouncing back and forth. It passed in this place, but on review it was found to have a flaw. We sent it back to the department saying that it should be fixed. The first piece of correspondence on that matter actually took place 23 years ago. A problem in a regulation was cited 23 years ago. The departments are still bouncing back and forth as to who is to blame and why it cannot be done.

Bank ActGovernment Orders

4:20 p.m.

Liberal

Robert Thibault Liberal West Nova, NS

The Fisheries Act.

Bank ActGovernment Orders

4:20 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

It has to do with the Fisheries Act; the member is quite right.

Here we have the same kind of thing. There are hundreds of amendments, many of them technical, some of which will lose the continuity of the knowledge of the people who are here. We can see how important this is. When we have a bill like this, we have the assurances, the sign off by the minister and all of the clearances, but technically, with regard to parliamentarians, there are more changes in this bill than any one person could possibly be responsible for or track to ensure that their implementation received the proper attention.

The Standing Joint Committee on Scrutiny of Regulations will have to review some of these to the extent that they are amendments to regulations which currently exist to make absolutely sure that the bills to which they relate have enabling provisions within them for that amendment to happen.

We have seen cases, for instance, in the Broadcasting Act there was a regulation which allowed the charging of fees for services provided to the cable industry. As it turned out, the fees were far in excess of the costs that were incurred by the CRTC and in fact were creating surpluses because the fees were excessive. It is currently before the courts. If it is on a cost recovery basis that is fine, but if the amount recovered is more than the costs, it is effectively a form of taxation. Taxation is not enabled in the legislation. In the Broadcasting Act a tax cannot be levied.

Members can see why I hesitate to attempt to try to provide some insight into even one of these because it would probably take an entire speech to explain one of the technical amendments in a way in which all hon. members could understand. That is something we cannot do, but I wanted members to understand that I am confident that the changes that have been made have been followed in due process and the departmental officials have given us the necessary assurances.

I believe members will find there is strong support to pass many of these amendments, most of which I agree very much are necessary to bring up to date the important legislation affecting the daily lives of all Canadians.

Bank ActGovernment Orders

4:25 p.m.

NDP

Olivia Chow NDP Trinity—Spadina, ON

Mr. Speaker, in the last six years while the Liberals were in government the total debt load carried by Canadians grew by 50%, the median load 38% to $44,500 per family. The line of credit debt grew more than double to $68 billion and the median line of credit debt jumped 56% to $9,000. For average Canadians that means almost $14 in debt for every $100 in assets. That is a huge jump.

The Government of Canada is loading the debt onto ordinary Canadians. Whether they are students who are graduating with $20,000 in student loans and they are carrying that debt, or ordinary families, that debt load has jumped by 50%.

For 12 years the Liberals did nothing to cap the credit card rates. Would the member be willing to support the NDP motion to begin to cap credit card interest rates at 5%? There is absolutely no reason when the prime rate right now is 6% that the credit card interest rate would be 17% to 18%. Ordinary Canadians are being gouged. Would the member support an NDP initiative to cap credit card interest rates?

Bank ActGovernment Orders

4:25 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, that certainly is a very creative way of getting around to a question which the House has dealt with in private members' bills and in debate before.

I can recall that the minister of industry of the day, Mr. Manley, reported on the Industry Canada website all of the credit card companies and the various rates. The member should know that there are certain commercial entities that have cards with very high interest rates. There are other institutions, particularly the principal banks, which seek to have appropriate rates for their cards.

The problem is whether or not the government should get into the business of legislating how businesses do their business. It is a free market system. They can charge what they want. The most important thing is that there is a competitive environment in which Canadians have choices. The more competition, the more choices. A competitive environment keeps the rates low.

I suggest to the member that financing one's lifestyle on a credit card is a bad investment in the first instance.

Bank ActGovernment Orders

4:25 p.m.

Liberal

Robert Thibault Liberal West Nova, NS

Mr. Speaker, the hon. member made a great exposé of the bill before the House. He spent a lot of time on the process of getting a bill here and how the work gets done by others to make sure that we have the information needed so that we can finally take a decision in Parliament.

One point in this bill discussed earlier is the question of the reserves necessary at institutions like Canada Mortgage and Housing Corporation. Some people would point to the increase in the reserve over the last few years without taking into consideration the changes that have happened in the domestic market situation and domestic mortgages.

Not too long ago it was impossible for a first time buyer to buy a house if the buyer did not have a 10% deposit. Then the regulations were changed to allow for substantially lower deposits. In some cases no deposits were necessary. But that is guaranteed and backstopped with the financial institutions and Canada Mortgage and Housing Corporation plays a great role there. There has been a greatly increased risk.

The member pointed out the question of risk and that the risk had to be covered. When there is less of a deposit in the initial purchase with the mortgage at the bank, the risk grows exponentially. Look at what is happening in the housing market in our principal cities where young couples are working. Alberta is having a huge growth and many people from across the country are going to work there. The housing market there is inflating incredibly fast. If we want young couples to be able to buy homes, then they need that type of assistance from CMHC and the type of reserves needed to backstop it. I would ask the member to comment on that.

Bank ActGovernment Orders

4:30 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I thank the hon. member for his kind words. I could make the very identical commentary on the member's work in this place on a broad range of issues in representing his constituents and eastern Canada.

Banks, insurance companies, credit unions, CMHC and other institutions under the jurisdiction with respect to the financial institutions of Canada all have reserve requirements. This is the law. It is established so that there is coverage in the event that there are losses.

We could imagine an insurance company that simply sells insurance policies and collects the premiums and hopes that it is going to be able to keep the losses down so that it does not make a loss. When I was a chartered accountant with Price Waterhouse I had three insurance companies that I did the audits for, and in all the years that I was there, at least five or six years, there was not one year in which an insurance company made money on selling insurance. Where the insurance companies made their money was on the investment income on the investment portfolio that they were obligated to have to backstop the loans or the insurance policies and the risk on the policies.

That is the way it works. There has to be this guarantee. We can imagine what would happen if an insurance company had sold millions of dollars of general insurance and all of a sudden had an enormous claim that wiped it out. What about the protection for all the other policyholders?

The same has to do with housing. CMHC provides about $1.9 billion of mortgage insurance to Canadians every year. It is a tremendous amount of money and it requires a tremendous amount of reserve. The member is quite right about what is happening in the major urban centres, particularly in the west where the price of houses has gone through the roof because of the significant growth in economic activity. Mortgages being held by people are very substantial. Should something occur where that economic activity tapers off for one reason or another in a significant way, jobs would be lost, people would start selling houses, the value of houses would go down and people would find that they owed more on the mortgage than the house was worth and they would walk away from it. Who would take care of the mortgage?

These mechanics with regard to financial institutions and those who provide the security of Canadians in fact provide us with one of the most secure financial regimes of any country that I know of in terms of the major loss levels and for the extreme risk because of the reinsurance programs that are available.

The member is quite right. The reserves are there in accordance with the law to be sure that there is ample coverage and security for all Canadians, regardless of the financial services they are receiving.

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4:35 p.m.

Liberal

Judy Sgro Liberal York West, ON

Mr. Speaker, I was listening earlier when the member was talking about a private member's bill that he had introduced from the Senate.

I would like to know why anyone would go to all of the work of bringing in legislation, getting it through the House and not follow it through or make sure that whoever was the government of the day at least paid attention to the fact that it was on the books?

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4:35 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, there were two entire pieces of legislation that had been on the books for over 10 years and had not been enacted. If this bill were in play, it would have repealed them. The others were about 57 pieces of legislation which were amending other acts.

These are the kinds of things that occur in a great number of cases when it is a change in government, or it could very well be that they were done to anticipate certain things.

What it gets down to and I think what we really concluded in the discussion on this was that it is important to look at all aspects--

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4:35 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

Resuming debate. The hon. member for Esquimalt—Juan de Fuca.

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4:35 p.m.

Liberal

Keith Martin Liberal Esquimalt—Juan de Fuca, BC

Mr. Speaker, it is a pleasure today to speak to Bill C-37, An Act to amend the law governing financial institutions and to provide for related and consequential matters. Essentially it is the Bank Act review.

The government has drafted a bill that largely follows Liberal policy that has been occurring over the last five years. This legislation was a result of recommendations that came from a white paper that was commissioned by the previous government.

The bill represents the statutory five year review of the Bank Act, and there is nothing in the bill, quite frankly, that is particularly contentious. The government avoided a number of controversial issues and has provided some important updates that we have been fighting for and in fact was an extension of what we were doing before.

The bill satisfies the obligations of the government to present statutory updates to the Bank Act every five years, so in essence, it is a rather rudimentary bill, almost administrative in nature. The last time this happened was in 2001.

Bill C-37 will ensure that financial institutions provide greater and more timely disclosure to consumers in areas such as deposit type of investment products and complaint handling procedures. I think that is probably music to the ears of most Canadians in dealing with their banks. The bill and this update will provide consumers with a lot more accountability and knowledge about what is happening with respect to their accounts and their activities with the financial institutions of their choice.

The Bank Act, in this particular review, also does something which I think is quite intelligent. It expands the definition in terms of what one defines as a large bank and one that is a medium sized bank, so as a result of an increase in assets, the definition and threshold will be increased from $5 billion to $8 billion. That is a sensible thing for the banks which could be credited as being one of the great success stories in Canada and are competitive internationally. Those banks hire a lot of Canadians and provide a lot of asset attraction with respect to private capital into Canada that can be invested in our country and used to create jobs, and hopefully, jobs that pay very well.

The bill also increases the use of electronic cheque imaging, which is a technology that will allow financial institutions to transfer cheques more efficiently. The bill also proposes to reduce the cost of mortgages for some borrowers by increasing to 80% the loan to value threshold above which mortgage insurance is required by the statute.

There are also some provisions that I hope the government takes into consideration. Because of the value of homes increase quite significantly, it would be wise for the government to start looking at CMHC grants and allowing the valuation of those homes to be bumped up quite significantly. I would personally recommend at least a 50% increase for the value of those homes, specifically in my area of Victoria, British Columbia, where house prices have increased astronomically.

People have been forced to buy homes, the value of which may be much higher than in most other parts of the country, but they are not able to access the CMHC grants that are available to most Canadians. A home of one size, all things being equal, may be equivalent to one in most other parts of Canada; however, the value of the home in a place like Vancouver and Victoria will be so much greater as to push that home above the ability of the individual to access CMHC grants. Most Canadians have made all of us very aware of this problem. I would strongly encourage the government to resolve this.

One of the things that the Canadian International Development Agency has done over the last year is moved the international development envelope from what we call project funding to what is called program funding. What does that mean?

Project funding would be something that we would do in terms of Afghanistan. We would fund a particular project such as the building of a school. We would probably do it through a Canadian NGO or an Afghan domestic NGO.

That is a very efficient way of ensuring that taxpayers' money is going to be used to help the people on the ground who need the help, but curiously, what has happened over the last year is that the government, and CIDA in particular, has moved to something called program funding. What it is doing is taking a large amount of money, $50 million, $60 million and even more, and giving it to a large organization.

What does that mean? It means we are giving $50 million to $60 million to a large organization such as UNICEF, the World Bank or the IMF, and we utterly lose traction and accountability with respect to those moneys. This is not an intelligent way for us to use taxpayers' money to help those who are less fortunate.

I would encourage CIDA and the minister to really take a close look at this. It does not mean that we do not have to invest in the international financial institutions. They have a very important role, but if we are going to take our international development envelope, the ODA, and simply take that money, divvy it up into rather large chunks of money and give it to very large international multilateral organizations, we lose traction, we lose accountability, and we lose the ability of Canadians and Canadian NGOs, and Canadian companies quite frankly, to execute those roles on the ground.

We have seen over the last few years a shift in our international development envelope. We are not giving money to Canadian NGOs, small NGOs and groups, particularly Canadians out there who are doing an incredible amount of work, but taking the funds from those groups that are very effective at getting work done on the ground, and instead giving it to these large black holes of large multinationals. We do not know where that money goes or what it is used for, and it utterly loses the connection between those Canadian dollars and our wonderful nation.

This is not an intelligent thing to do because not only do we lose accountability and the branding that identifies Canada as the country that has given those moneys but we also lose the effectiveness. I would argue, and I would challenge members to say otherwise, that the most effective way of using our international development assistance is through small NGOs, either international small NGOs that are working on the ground or Canadian NGOs.

Right now, Canadian NGOs can only compete for a paltry $20 million out of the $3.2 billion official development assistance envelope. Does that make sense? The fact is that from coast to coast, in our ridings, there are thousands of non-governmental organizations in our wonderful country, people who are committed, many of whom are volunteers and most of whom are doing an outstanding job on the ground. Those groups should be able to compete for the official development assistance envelope in a way that enables them to be able to carry out their duties on the ground, consistent of course with the objectives of our ODA.

That is a much better way of using Canadian taxpayers' money rather than taking moneys and plunking them into the World Bank where we completely and utterly lose the accountability and effectiveness of those moneys.

This is something that will require a sea of change on the part of the minister and I hope she understands this because one of the great frustrations, and I think all of us have seen this with respect to Afghanistan, is that we are missing the boat in Afghanistan. We are certainly doing a good job from the military aspect, and our defence forces and RCMP deserve enormous credit for the hard work that they are doing, but there are four or five things that we need to do, in my view, that will provide security on the ground in that country, and they are as follows.

First, a Loya Jirga is required in Afghanistan that will bring in those groups that have been disarticulated from the Bonn agreement and bring them to the decision-making table. Right now they are excluded and right now they have become part of the Taliban, warring against us.

Second, and the Minister of Foreign Affairs was just in Latvia along with the Prime Minister, we need to ask our NATO allies to invest in the training of the Afghan police. Right now they are being paid $70 a month. Their training is eight days. They are not equipped to do the job, so what has happened is that many of them are engaging in thuggish behaviour simply to put food on the table for themselves and their families.

What does this mean on the ground for our troops? It means that once they go out there and take out the Taliban there is nothing to come in after them which will enable our troops to be assured that security is going to take place. There is no effective constabulary force on the ground. Our troops are doing a yeoman's job, an incredible job, of removing the immediate threat, but there is nothing coming after they are done. Now, the Germans have been tasked to do this.

What I would ask the Minister of Foreign Affairs to do is to ask the other NATO allies to contribute money for salaries, money for training, and money for the equipment that the Afghans need. If we do that and build up an effective Afghan police force, then that will go a long way to providing the long term security the country needs. If we do not deal with that, we will have a major problem.

Third, we have a major problem with respect to an insurgency coming from outside Afghanistan. If the insurgency that is coming, particularly from Pakistan, is not dealt with there will be war without end. The border is porous. We know that. We cannot block that border off. It is too large, too wild, and too strategically impossible to block off.

What we have to do in my view is call together a regional summit of countries that will bring together the regional powers that will be dealing with the Afghan security. Only by doing this will we be able to address this problem of blocking off and reducing the threat from the outside.

Those individuals who are blowing themselves up as suicide bombers in Afghanistan and those groups that are shooting and trying to kill our troops, many of those, in fact the vast majority, are from outside Afghanistan. They are Pashtuns from Pakistan, Chechens, Tajiks, Kazaks and others, in addition to those from the gulf states. These people are flowing into Afghanistan, particularly in the south, and they are the ones who are killing our people.

No military solution will be able to resolve this. The Minister of National Defence understand this and the Chief of the Defence Staff understand this as well very clearly. So if we accept that as a fact, how are we going to address this?

Leopard tanks are required by the NCOs on the ground and they should get whatever they want. We must also provide other solutions. I know the government is seeking other solutions. This plan will address that: one, ensure the Aghans have the Loya Jirga and have the meeting with all groups, particularly those who have been excluded; two, train the Afghan police; and three, ensure that the development envelope is going to work.

Mr. Karzai's government is roundly known as being utterly corrupt. If the government is being utterly corrupt, we must, if we are giving moneys to him, which we are in the amount of $100 million a year, ensure that those moneys are going to be used effectively and wisely. That is our responsibility to the taxpayers and indeed to the Afghan people. Right now his government is corrupt and money coming in the front door is going out the back door into the hands of the warlords and drug dealers.

Fourth, with respect to the issue of the opium crop, we know the opium crop is the highest it has ever been. How do we deal with that? We can deal with that by transferring the opium into the legal production of medically-used narcotics. If we are able to transfer those moneys from that area to legal production, we will undercut the financial underpinnings that are being used right now to fuel the Taliban and the warlords. We have to do that. It is absolutely essential.

The last point is the development envelope. That is where the banks come into play; the international financial institutions that we are talking about today, in part.

Those international financial institutions must be able to ensure that the moneys are getting on the ground to the people who need it. The development assistance envelope is not functioning that way. Right now Afghanistan, as a post-reconstruction country, is receiving perhaps the least amount of any post-reconstruction country that we have ever seen.

The NATO countries that are not willing to contribute the troops can do a lot more by contributing moneys for international development. We have to ensure that the accountability is there. We have to give President Karzai the budget support that he requires and also have the accountability checks and balances to make sure that our moneys are being used wisely. Again, have the Loya Jirga and the regional summit to address the insurgency coming from the outside.

I see my time is almost up. Is that correct?

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4:50 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

It is not quite time. In the last few minutes the hon. member has not dealt very much with the actual bill before the House. I would just ask him, if he wants to finish up his comments, to stay relevant to the actual bill in front of us and the matter at hand.

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4:50 p.m.

Liberal

Keith Martin Liberal Esquimalt—Juan de Fuca, BC

Mr. Speaker, I will just finish my comments on Afghanistan. That five point plan, which is attached to the international development and financial institutions, will enable us to do this.

I want to talk a little about our banks here at home, and also economic productivity, which is attached to this bill. We know that our banks are a great success story for Canada in terms of industry, but this also leads us into the issue of productivity and how our government and in fact the House can provide solutions to improve productivity in our country.

There are some ways to do that. First, we have to be able to put more money into Rx and D. The government has failed to continue the investments into research and development that we made when we were in power. Second, we have to continue the reduction of taxes to make sure that our tax base is competitive internationally. Third, we have to remove interprovincial trade barriers.

There has been an agreement between my province of British Columbia and Alberta. The agreement between Alberta and British Columbia shows incredible foresight. In fact, it is an incredible model for other provinces to adopt. I certainly hope this model is adopted. What does it do? The agreement between British Columbia and Alberta enables people to work across borders. It facilitates the movement of labour, the movement of capital and the recognition of skills.

Why on earth do we have a situation in our beautiful country where there are more barriers to trade east to west than there are north to south? It makes no sense. We have to deal with the reduction of interprovincial trade barriers.

We also have to enable the private sector to work more effectively. By working with the banks and the private sector, we can find ways in which we can ensure that start-up capital is there for the small to medium sized businesses that are the prime economic generators in our country.

One of the complaints we members of Parliament hear is that the small businesses in our communities really struggle to find the seed capital required to take their ideas from paper to product. This is something that I think would be innovative for the government to adopt if it were to discuss it with the banks, the other financial institutions and the private sector and find out how we actually can do this.

For example, recently there was the issue of British Columbia Ferries purchasing a ship called the Sonja, from Spain. There is an import duty tax of about 17% on the purchase of that ship. That tax will go to general revenues.

However, let us suppose that we took that import tax the company is paying and put it into a fund for the modernization of our shipbuilding industry on the east and west coasts. The president of a shipbuilding company could access the funds but only if the funds were matched. That is the key. That is the beauty of this. A company cannot simply ask for those funds. It can access the funds, but only if it is able to put in its own money. That way, we get a buy-in from the private sector. If we were to do that, our shipbuilding industry would be able to acquire a niche in the medium sized shipbuilding area that would be extraordinary.

I know that on the west coast B.C. Ferries is going to require between 12 and 17 ships. In the future, the navy is going to require ships, which will be built in a compartmentalized fashion. If we are able to build them in Canada, and I am totally confident that we are, this is something intelligent that we could do with respect to our shipbuilders. I know that in my riding of Esquimalt—Juan de Fuca this is very important, but it is also important to the east coast.

Why do we not take that import tax, put it into a special fund, ask the private sector to use those moneys and add their own moneys, purely for the modernization of their infrastructure? We already have an excellent shipbuilding industry, albeit much smaller than what it was. We can expand that. Our shipbuilders, the people who do the work, the technically skilled individuals, are really outstanding. We cannot lose that skill set.

In my view, there is no reason whatsoever why we as a country cannot compete. That is where this bill comes in. Banks can work with the government and the private sector and enable us to be more competitive. This will benefit Canadians from coast to coast.

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4:55 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

It is my duty pursuant to Standing Order 38 to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Thunder Bay—Rainy River, Airport Security.