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House of Commons Hansard #119 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was bank.

Topics

Canadian HeritageCommittees of the HouseRoutine Proceedings

11:20 a.m.

Conservative

The Acting Speaker Conservative Royal Galipeau

The question is on the motion. Is it the pleasure of the House to adopt the motion?

Canadian HeritageCommittees of the HouseRoutine Proceedings

11:20 a.m.

Some hon. members

Agreed.

No.

Canadian HeritageCommittees of the HouseRoutine Proceedings

11:20 a.m.

Conservative

The Acting Speaker Conservative Royal Galipeau

All those in favour of the motion will please say yea.

Canadian HeritageCommittees of the HouseRoutine Proceedings

11:20 a.m.

Some hon. members

Yea.

Canadian HeritageCommittees of the HouseRoutine Proceedings

11:20 a.m.

Conservative

The Acting Speaker Conservative Royal Galipeau

All those opposed will please say nay.

Canadian HeritageCommittees of the HouseRoutine Proceedings

11:20 a.m.

Some hon. members

Nay.

Canadian HeritageCommittees of the HouseRoutine Proceedings

11:20 a.m.

Conservative

The Acting Speaker Conservative Royal Galipeau

In my opinion the nays have it.

And five or more members having risen:

The division on the motion stands deferred.

The House will now continue with the remaining business under routine proceedings.

PovertyPetitionsRoutine Proceedings

11:25 a.m.

Liberal

Mario Silva Liberal Davenport, ON

Mr. Speaker, I have several petitions to present today. One is on “Make Poverty History”. The petition calls upon Parliament and the House to support raising the child tax benefit to $4,900 per child to help eradicate child poverty in Canada.

Over a billion people around the world live in abject poverty. Poverty kills more than 50,000 people every day. In Canada, 15 years after Parliament vowed to end child poverty, one out of six children live in poverty.

In Ottawa all party leaders and the Prime Minister have agreed that global poverty needs an urgent response.

I support the “Make Poverty History” campaign in Canada, a citizens' movement advocating for more and better aid, the cancellation of the debt in the poorest countries and to end child poverty in Canada.

ImmigrationPetitionsRoutine Proceedings

11:25 a.m.

Liberal

Mario Silva Liberal Davenport, ON

Mr. Speaker, as well I have 10 other petitions that call upon Parliament and the House to resolve the issue of undocumented workers.

On many occasions in the House, I have had the opportunity to raise the issue that undocumented workers play a vital role in Canada's economy and society. We have asked that the government look at this situation and come up with a humane and just solution to their plight.

LiteracyPetitionsRoutine Proceedings

11:25 a.m.

Liberal

Mario Silva Liberal Davenport, ON

In addition, Mr. Speaker, I have a petition that is signed by members of my riding of Davenport, members of St. John's, Newfoundland and of the riding of Parry Sound—Muskoka who draw to the attention of the House that literacy is a prerequisite for socio-economic development and that approximately 38% of Canadians have difficulty reading and writing.

Therefore, the petitioners call upon Parliament to reinstate the funding for literacy programs cut by the Conservative government and to undertake a national literacy strategy to ensure that all Canadians have the opportunity to achieve this vital skill.

JusticePetitionsRoutine Proceedings

11:25 a.m.

Liberal

Yasmin Ratansi Liberal Don Valley East, ON

Mr. Speaker, I am pleased to rise in the House today to present a petition on behalf of my constituent, Ms. Kelly Fairchild, who calls upon the Government of Canada to increase stronger measures against those convicted of child sexual abuse and to recognize the survivors of sexual abuse.

Goods and Services TaxPetitionsRoutine Proceedings

11:25 a.m.

Conservative

Ed Fast Conservative Abbotsford, BC

Mr. Speaker, it gives me great pleasure to rise in the House today to table a petition signed by 82 residents from my riding and across British Columbia.

The petitioners call upon Parliament to eliminate the GST on used goods, since customers have already paid this tax on the items at first purchase.

LiteracyPetitionsRoutine Proceedings

11:25 a.m.

Liberal

Glen Pearson Liberal London North Centre, ON

Mr. Speaker, I am pleased to present another petition, one of several that my office has received, dealing with the issue of Bill C-316. The petitioners call upon Parliament to reinstate funding to the literacy program cut by the Conservative government.

I present the first of several petitions, which are from London. The petitioners note the importance of literacy for socio-economic development and the impact it has on our society. They recognize the need for Canada to help the 38% of Canadians who have trouble reading and writing.

I stand with the citizens of London in calling for the reinstatement of literacy funding and to undertake a national literacy strategy to ensure that all Canadians have the opportunity to achieve this vital skill.

Questions on the Order PaperRoutine Proceedings

February 27th, 2007 / 11:25 a.m.

Fort McMurray—Athabasca Alberta

Conservative

Brian Jean ConservativeParliamentary Secretary to the Minister of Transport

Mr. Speaker, I ask that all questions be allowed to stand.

Questions on the Order PaperRoutine Proceedings

11:25 a.m.

Conservative

The Acting Speaker Conservative Royal Galipeau

Is that agreed?

Questions on the Order PaperRoutine Proceedings

11:25 a.m.

Some hon. members

Agreed.

The House proceeded to the consideration of Bill C-37, An Act to amend the law governing financial institutions and to provide for related and consequential matters, as reported (with amendment) from the committee.

Bank ActGovernment Orders

11:30 a.m.

Conservative

Monte Solberg Conservative Medicine Hat, AB

moved that the bill, as amended, be concurred in.

(Motion agreed to)

Bank ActGovernment Orders

11:30 a.m.

Conservative

Monte Solberg Conservative Medicine Hat, AB

moved that the bill be read a third time and passed.

Bank ActGovernment Orders

11:30 a.m.

Calgary Nose Hill Alberta

Conservative

Diane Ablonczy ConservativeParliamentary Secretary to the Minister of Finance

Mr. Speaker, I appreciate the opportunity to introduce at third reading C-37. The bill would amend the legislation concerning the framework for financial institutions operating in Canada and it comes out of the five year review of the Bank Act undertaken by Parliament.

The financial services sector is key to the success of a modern industrial economy. That goes without saying. The sector plays a unique role in fuelling the growth that is essential to the success of the Canadian economy, but the significance of this proposed legislation goes beyond our borders. Canada is recognized internationally for our safe and secure financial sector and the bill would help ensure that Canada remains a world leader.

The goal of Canada's new government is to improve our quality of life and make Canada a world leader for today and future generations. How will we do that? Along with November's economic and fiscal update, the Minister of Finance introduced “Advantage Canada”. This long term plan will achieve a higher standard of living and better quality of life for Canadians as the world economy continues to transform.

I will talk a bit about the plan and illustrate just how Bill C-37 fits in.

“Advantage Canada” is rooted in the realities of global competition and Canada's existing strengths and economic challenges. As a long term vision, it will serve as the framework for government decision making for years to come. Competition drives firms to become more efficient, invest in new technologies and introduce new products and services that benefit consumers. A highly competitive and open national economy also helps our companies and organizations to be more successful when competing in global markets, which means more and better jobs in Canada.

Government has a role to play in creating the ground rules for competition in Canada. Consistent with the overall purpose and principles of the “Advantage Canada” plan, Canada's framework of competition will create competitive marketplaces that serve both individual and business consumers with low prices, choice, quality and service. The investment will also drive and foster innovation investment and efficiency that grow productivity and competitiveness and it will promote a more resilient adaptable economy.

“Advantage Canada” is about making Canada a world leader and a safe and efficient financial system is crucial to achieving that goal.

Canada has a strong and sound financial system that serves Canadians well. It is an asset unto itself, providing high end, knowledge based and well-paying jobs for Canadians. Of course a strong financial system needs to be able to adapt to the evolving needs of households and businesses.

Keeping Canada's financial institutions and markets innovative and competitive with a flexible regulatory framework founded on sound principles will ensure that they continue to meet not only the needs of our growing economy but also the needs of Canadians. That is where Bill C-37 comes in.

Just as “Advantage Canada” is about making Canada a leader in the world, the bill is about ensuring that Canada's financial system remains a leader in the world. To attain that goal, Canada must have a regulatory framework that allows financial sector participants to operate as efficiently and effectively as possible.

The Government of Canada is responsible for maintaining the safety and soundness of the financial institution sector. It is also responsible for ensuring that consumers and businesses are properly served and protected. The regular five year review of the financial sector framework is an important tool in meeting these responsibilities, and a consultation process was an integral part of that review.

A large and representative group of stakeholders provided comments to shape the review of the financial sector statutes. Over 50 submissions were received from various stakeholders, including industry associations, financial institutions, consumer groups and individual Canadians. Those submissions culminated in a white paper issued by the Minister of Finance this past June. The drafting of Bill C-37 followed to legislate the proposals set out in the white paper.

While stakeholders agreed that no major overhaul was needed, there was acknowledgement that some steps could be taken to enhance the interest of consumers, increase legislative and regulatory efficiency and adapt the framework to new developments. These three objectives are the framework on which the bill is built.

I will now illustrate how Bill C-37 meets these objectives.

First, Canada's new government wants to ensure that the interests of consumers are well served. As members can imagine, competition in the industry in technological innovation can sometimes make for a confusing array of products and services confronting consumers. It is therefore important that consumers have the information available to them to help make informed decisions.

That is why Bill C-37 proposes to improve disclosure to consumers. Perhaps one of the best examples of improved disclosure to consumers relates to the growth of online services. Currently, federally regulated financial institutions must disclose in their branches information on the amounts charged for services normally provided to their customers and the public.

However, with consumers increasingly managing their finances using Internet banking, these disclosure requirements currently do not extend to the online world. To ensure that consumers have sufficient information, Bill C-37 proposes to harmonize online disclosure requirements with those of the in-branch requirements. This proposed legislation will allow consumers to compare banking products and services more easily online.

Another important measure to address consumer interests in the bill is the proposal relating to complaint handling procedures. Federally regulated financial institutions are required to have procedures and staff in place to deal with complaints from consumers. These procedures must be filed with the Commissioner of the Financial Consumer Agency of Canada and must be provided to consumers when they open a deposit account.

However, there are currently no requirements to ensure that consumers have access to information on these procedures on an ongoing basis. In addition, consumers who do not open an account, but rather obtain other products and services such as a mortgage, do not receive any information on complaint handling procedures.

Consumer groups have raised concerns that consumers may be unable to readily obtain the necessary information on the proper complaint handling procedures when a complaint with their financial institution arises. Bill C-37 addresses that issue by proposing amendments to the financial institutions statutes that will require financial institutions to make their complaint handling procedures publicly available for all consumers to access whenever they choose.

One of the biggest advantages of a regular review of the financial sector, such as we have in Canada, is the ability to modify just the framework as the sector changes and evolves. For example, there is now increased competition in Canada from foreign banks. The framework encourages competition through the entry of foreign banks into the Canadian market. However, while foreign banks have considerable flexibility to do business in Canada, some aspects of the current regulatory mechanisms have been criticized as being complex and burdensome.

An area of significant concern has been the regulatory burden placed on the so-called near banks. These foreign entities are not regulated as banks in their home jurisdictions, but provide banking type services such as consumer loans. Of particular concern is the ministerial entry approval that near banks must obtain to undertake unregulated activities. This requirement is regarded as unnecessary and costly. Moreover, it results in delayed transactions and provides little benefit.

To simplify the foreign bank entry framework and reduce the administrative burden, Bill C-37 proposes to narrow the framework to focus on real foreign banks and remove near banks from the foreign bank entry framework by eliminating the entry approval for near banks undertaking unregulated financial services.

The financial services sector has changed dramatically in recent years. Globalization has certainly played a major part in this change but so too has convergence and consolidation in the industry and, of course, advances in technology have changed the way we do banking today. One just needs to look at the way cheques have been processed for years.

Traditionally, the cheque clearing process involved the physical delivery of cheques to the issuing financial institution before a decision could be made whether or not to make the payment. Now, with the use of computer scanning technology, cheques can be sent electronically to the originating financial institution.

The faster processing enables financial institutions to clear cheques more quickly, thus allowing consumers and businesses to have more timely access to funds. To reflect the faster cheque processing time, Bill C-37 proposes to facilitate the introduction of regulations limiting hold times imposed on cheques.

Instead of using this regulatory power, however, the government is in the process of finalizing an agreement with the banking industry to reduce the maximum hold period voluntarily for cheques to seven days from ten days. Once cheque imaging technology is fully implemented across Canada, the cheque hold time will further be reduced from seven days down to four days. This, of course, represents a significant benefit for consumers and businesses alike.

Once more, these changes illustrate the importance of having an up to date framework to allow financial institutions to evolve and prosper while benefiting consumers.

Bill C-37 also contains a proposal that would attract additional expertise to the industry. Specifically, the bill proposes to reduce the board of directors residency requirement for Canadian financial institutions from two-thirds to a majority. This would l allow Canadian financial institutions to add more foreign experts to their board. It would also enhance flexibility and give financial institutions new scope to pursue global business opportunities while maintaining a strong Canadian presence on their boards.

All told, the proposals in Bill C-37 will help modernize the regulations for our financial institutions, which makes this bill important for a number of reasons. First and foremost, the bill is important because it would cut red tape and advance the interests of consumers. It is also important because it would amend the legislative framework so that Canadian financial institutions can better compete in the international marketplace. The bill is important for Canada because it would ensure that Canada continues to be a world leader in the financial services industry.

I therefore would ask all hon. members to give this bill careful consideration and allow it to pass without delay.

Bank ActGovernment Orders

11:40 a.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, in his speech at second reading to the House, the finance minister stated:

The government believes that the best approach to improving services for consumers is through competition and disclosure....

He went on to say:

Disclosure...ensures that consumers and businesses alike have the relevant information they need to make the best decisions in light of the choices available to them.

I raise those quotes because in the bill that was presented to the House at second reading there was an additional clause to the Bank Act proposed which basically states that no account or service shall be offered to a customer unless, and it lays out information on all charges as disclosed, information on how the customer will be notified of an increase in charges, information about the bank's procedures relating to complaints and any other information that may be prescribed.

Interestingly enough, an amendment moved at committee changed this. It added a proviso which says, in the new subparagraph 448.3(2), that the governor in council may make regulations specifying the circumstances under which a bank need not provide that information to consumers.

Could the parliamentary secretary explain to the House why it is that certain accounts or services provided to Canadians would not require the proper disclosure of the charges and other conditions of providing that service or account?

Bank ActGovernment Orders

11:45 a.m.

Conservative

Diane Ablonczy Conservative Calgary Nose Hill, AB

Mr. Speaker, the simple answer is that all proper disclosure will be made. The amendment was passed by the committee simply to ensure there was no unnecessary red tape or redundant regulatory burdens put into place. On the one hand, we wanted to ensure that the act would ensure that consumers have full and greater disclosure but not in a way that would unnecessarily introduce red tape, which accomplishes nothing for consumers and causes more cost and inefficiency for banks.

It is a good balancing act and I think the member will support that as he considers the good balance that has been struck by the committee at report stage.

Bank ActGovernment Orders

11:45 a.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I think the member may have addressed another amendment that was made to the Bank Act, section 448.3. The amendment proposed by the committee was that the disclosure would be “in the prescribed manner”. I understand that is a proviso that would ensure there was no inefficiency in terms of disclosure or a lot of red tape.

However, the subclause (2) that is being added is very specific that the governor in council, i.e., the cabinet, can prescribe that certain accounts or services provided by a bank would be exempt from proper disclosure of the charges or conditions related to an account or other services.

I would ask the member again whether she can give us one example of an account or some prescribed service included in the regulations to the Bank Act that would not require disclosure or in the future may be introduced that would not require such disclosure.

Bank ActGovernment Orders

11:45 a.m.

Conservative

Diane Ablonczy Conservative Calgary Nose Hill, AB

Mr. Speaker, this provision was put into the Bank Act to ensure there is a proper balance so that if disclosure is not needed by consumers, the banks do not need to have extra unnecessary red tape. This judgment is made from time to time by governments and the act simply allows that judgment call to be made.

However, the first focus of the Bank Act and of all governments is to ensure that businesses, consumers and the users of financial services have the disclosure they need. I assure the hon. member that nothing in the Bank Act, as it is tabled in the House, will detract from that. In fact, it enhances the choice, competition and information that is provided to consumers and the country.

Bank ActGovernment Orders

11:45 a.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

Mr. Speaker, I am pleased to speak to Bill C-37, an act to amend the law governing financial institutions.

I was glad to see that all the members of the Standing Committee on Finance delivered the bill back to the House in such an expeditious manner. We certainly look forward to continuing the debate here.

A vibrant 21st century economy requires, at its bedrock, a strong and well regulated financial sector that is not needlessly bound by red tape and yet, at the same, protects the interests of its citizens.

In many respects, Canada's financial services sector is the envy of the world. The expertise of our financial services sector is often sought out by our international friends. It has also helped our homegrown Canadian banks make real progress in expanding their services to other countries.

In fact, while our banks currently employ about a quarter million Canadians here at home, they now employ roughly 40,000 other people around the world. Indeed, this function of our banks, and at least as much our insurance companies, in taking on the world overseas in China, in India and in many other countries, is a very good thing for this country. Canada, as a whole, needs to take on the world. We need to compete with China, India and other emerging economic giants and, therefore, it should be core and central to government policy to prepare us for this new, highly competitive 21st century.

While our banks are certainly doing well, our government in the past year has been totally asleep at the switch. In terms of preparing Canada for the 21st century economy, I would contend that just as the government wasted a year when it came to the environment, cutting environmental programs until it woke up and looked at the polls, similarly, it has been totally asleep at the switch and totally wasted the last year when it comes to building a strong economy for the 21st century.

It is not a great puzzle what has to be done. We in Canada will compete with China and India, not through low wages, which is the last thing we want to do, but through good ideas, a highly educated workforce and research and training, which are all the things the government has cut.

We must also compete through lower income taxes and competitive taxation but the government raised income taxes.

At a time when the government has literally been swimming in money, with huge surpluses bequeathed to it by the previous government, it saw fit to slash funding for research, cancel programs for training Canadians and to raise income taxes. Those are all things that are the antithesis, the opposite of what has to be done in order to prepare Canada for the 21st century economy.

It is not as if our competitor countries have been standing still. We can look at what Australia has been doing. While our government insults China, Australia has been negotiating agreements with China. While Australia has reduced its income taxes, increased credits for low income Australians and made company taxes more competitive, what has our government done? It has raised income taxes. Yes, it has reduced the GST but that does nothing to make our country more competitive. While Australia forges ahead, Canada sits back and does nothing.

The United Kingdom is another example. It has ambitious targets for research and development over the next decade, backed by government support to achieve those targets. The European Union has even more ambitious targets for research. What do we do? We slash research funding.

I think this is totally irresponsible behaviour on the part of the government. When it is swimming in cash, it has no excuse for raising income taxes, no excuse for slashing research funding and no excuse for slashing support for training Canadians because it is only through well-trained, well-educated and innovative people that we will be able to take on the world, and the government has gone in the opposite direction.

I applaud our financial institutions for taking on the world and for showing success in Asia, but the government has to go beyond those successes that we see today. The government has to build a strong economy. It has to put in place policies that will create jobs for the future. The government, sad to say, has done precisely the opposite.

To return to the Bank Act, the five year review of the act is not something that happens overnight. In fact, it began more than two years ago, when the previous Liberal government began a consultation process and outlined what ground it expected the review to cover. While it is good to see good Liberal policy brought to this place--