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.
The Acting Speaker Conservative Andrew Scheer
I am a little bit hesitant to give the floor to the hon. member for Scarborough Centre. I thought he may have asked all his questions during the member's speech, but I will allow him to ask one now.
John Cannis Liberal Scarborough Centre, ON
Mr. Speaker, the member for Winnipeg North asked that there be public consultations when bank branches close. I will give the member some of my personal experiences but I will not name the bank because it would not be proper.
At least a decade ago, when closures and consolidations were taking place, I spoke with bank officials. Community members were brought in and we discussed the matter. The bank was very public and open before it closed.
What she is asking for now, when it was brought to the attention of banks years ago they did it. I am not here to speak for the banks but I am also not here to bash the institutions.
The member said that banks were paying exorbitant salaries. Who is she to tell these businesses how much to pay their people? It is irrelevant. We should let the public choose.
The member said that when people go to an ATM machine they are charged $5 or $6 to take out $30 or $40. I think that is an inaccurate statement. I use ATMs and I am charged a fee of $1.50. If I do not want to pay that fee, I go to my own branch's ATM. If I find myself somewhere where I need some money unexpectedly, I choose to use an ATM. If I do not wish to use it, I do not. However, I believe I pay a fee of $1.50 and she quoted $5 or $6. Her statement not only misleads Canadians but it adds fuel to the fire, which is not fair to the average Canadian. I would ask her to correct that if she will.
Judy Wasylycia-Leis NDP Winnipeg North, MB
Mr. Speaker, I would refer the member to The Globe and Mail article of a couple of days ago which had the full chart of ATM fees. He will note that I said up to $5 or $6, which is the maximum fee for accessing one's own money through a private ATM. The fee ranges from about $1 for accessing an ATM at one's own bank to a higher rate for accessing a competitor's ATM and then to a maximum of $6.15 if one were to access a private label ATM. The member can check the facts. I certainly will not apologize for giving the actual facts to the House.
With respect to the question of closures, I am glad to hear that the member had this experience with a bank and that he is happy with the fact that the bank proceeded to close. Some of us come from areas that have seen all bank branches close. In my area of Winnipeg North we lost 10 bank branches in the space of the last six or seven years and the community fought each one of them. The community went to the bank in each case. We rallied and worked together. We protested, we met, we called and we signed petitions. We did everything possible to convince those banks to stay or to at least prove that they were not profitable. We could not get the financial statements nor could get the information to know the actual situation. We could not force one bank to stay.
When the last bank closed a few years back, which was CIBC, we managed to convince it to give a bit of money to study an alternative financial services centre and managed to get the bank to sell its building to the community for $1.
The community rallied. My community felt that they had been loyal to their banks for many years and if the banks could not in turn be loyal to them, they would do it on their own. In November of last year, the Alternative Community Financial Services Centre was opened in my constituency of Winnipeg North as a result of the community coming together, working with the credit union movement, the Assiniboine Credit Union, SEED Winnipeg, the United Way and a number of organizations that realized the importance of every community having some sort of banking presence. This was a very successful victory.
We are now working hard on trying to bring regulations over payday lenders because that is what we have been left with.
What we are trying to say in this review of the Bank Act is that with $19 billion in profits, there is no way in heaven's name that banks should be closing bank branches arbitrarily and paying their CEOs that kind of money without some accountability to the community. If the member does not understand why we are here, what our role is as an MP and what Parliament does, it is to ensure that Canadians have some access to justice and fairness.
Louise Thibault Bloc Rimouski-Neigette—Témiscouata—Les Basques, QC
Mr. Speaker, I was pleased to hear my colleague tell us about the gigantic profits of banks, the huge and out of line salaries of CEOs and their friends, the use of tax havens by banks—which is essentially tax avoidance—and, finally, an issue that is dear to my heart, namely territorial inequity.
She talked about territorial inequity by raising the fact that citizens from rural areas pay the price for branch closures and lack of services, which is even more outrageous when preceded by the comments that I made about what the member said.
I would like to have her opinion on community reinvestment, if she has the time to tell us about that.
Judy Wasylycia-Leis NDP Winnipeg North, MB
Mr. Speaker, I thank the member for her question. It is very important to talk about alternative proposals with regard to this issue.
I will continue in English, because I lack many words on this subject.
I want to thank the Community Reinvestment Coalition, the Canadian Consumer Initiative, the Consumers Association of Canada, the Public Interest Advocacy Centre and Democracy Watch. Those are all the organizations that came to our committee with alternatives and with suggestions.
I also want to commend the Bloc for bringing forward an amendment dealing with the community reinvestment legislation. This is, interestingly, legislation that exists in the United States. It requires banks to actually invest in their communities, to put back into the communities the money that they received as a result of client and consumer loyalty. It is key to this notion of rebuilding communities by involving the banks and financial institutions and ensuring that we have the provisions to give everybody in our society the ability to play a role and make a difference.
I would like to commend the Bloc and everyone who takes up this mantle of the community reinvestment act. I know we did not get the legislation through at committee but I hope that some day we will get this legislation in this country. It is not often that we use the Americans as an example of doing something positive but in this case the legislation works. It ensures that banks have some commitment to give back to their communities and it provides for necessary community economic development.
One of the reasons we were so excited in Winnipeg when we got the alternative services up and running is that it allows low income earners to get help with setting up bank accounts, saving money and budgeting. It also provides some cheque cashing arrangements without having to go to usurious payday lenders and it has some micro-lending capacity.
It is a very exciting initiative and the first of its kind in this country. I look forward to the day when we can see this kind of notion spread across this country. I hope some day the banks come back to this notion of community investment and working with community groups to build strong, self-sufficient families and communities.
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, the member talked a lot about accountability, transparency and openness. She spent a lot of time in her speech advocating for saving ATM fees, $1 to $6, for those who cannot afford them.
How can she be an advocate for transparency, openness and accountability when she and her party are supporting the government on the taxation of income trusts, which steals $25 billion away from the value of the investments of Canadians, mostly seniors and those living on their retirement incomes? These trusts are their nest eggs.
How is it that the member would have the duplicity to come to this place and say that she is a champion of accountability, transparency and openness and turn around and stab seniors in the back?
Judy Wasylycia-Leis NDP Winnipeg North, MB
Mr. Speaker, we would not be in this situation today if the Liberals had taken this issue seriously when they were in government.
We know that over a a dozen years the Liberals were warned that they had to deal with the growing problem of tax leakage because income trusts were taking on a certain dominance in the investment sector. In fact, just before the 2006 election, the minister then was in the middle of a consultation process, which was cut short because of the looming election, and probably therein lies the difficulties they faced consequently.
However, the real issue here for seniors and Canadians everywhere is the potential loss of over $1 billion annually as a result of corporations using income trusts for a tax advantage. That had to be stopped and the Liberals know it. It is time they declared their position.
Yasmin Ratansi Liberal Don Valley East, ON
Mr. Speaker, on behalf of my constituents of Don Valley East, I am pleased to address Bill C-37, An Act to amend the law governing financial institutions and to provide for related and consequential matters.
Canada is somewhat unique in the sense that all federal legislation relating to financial institutions is subject to a sunset clause and must, therefore, be reviewed every five years by law. This has the effect of making Canadian financial institutions more efficient by keeping up with rapid changes in technology and the variety of services which arise from new technologies.
As the hon. member for Markham—Unionville has indicated in the House, the main content of Bill C-37 is largely based on the white paper commissioned by the former Liberal government in preparation for the statutory review of the Bank Act.
One of the aspects of this bill that I approve is the provision for an increased disclosure regime that would provide Canadian consumers and businesses alike with the information they need in order to make the most informed investment decisions possible. Bill C-37 would ensure that the savings products disclosure regime is just as effective for the millions of online bankers as it is for branch customers.
Strong competition and information disclosure are two of the best tools available to ensure that Canadian consumers' needs are being served well by our financial institutions. On the disclosure front, however, I am disappointed that the Conservatives have ignored one strong suggestion from the white paper regarding the complaint process for financial institutions.
I imagine that many Canadians are not very familiar with what the complaint process is at their local banks. Legislating that information with respect to the complaints process be readily available would have been a good idea.
I am willing to bet that there are a good number of Canadians who do not even know that there is an ombudsman for banking services should they exhaust all venues available to them. However, the ombudsman for banking services and his office do fine work and I would like to have seen a requirement for information about his service be made readily available.
Canada's mortgage loan insurance threshold would also be changed by this bill. Currently, any homebuyer who provides less than a 25% deposit is required by law to ensure that a mortgage through the Canada Mortgage and Housing Corporation or similar private sector providers will be able to attend to this.
Bill C-37 would reduce this minimum requirement of 25% to 20%, allowing more Canadians to secure a home mortgage without having to pay the additional costs of mortgage insurance. Obviously it is sensible to have some sort of legal threshold under which Canadians must purchase their mortgage insurance. During the Mulroney years of uncontrollable inflation, it was far more than sensible. It was both prudent and necessary.
After decades of strong Liberal leadership, however, this country is enjoying both low inflation and record low unemployment rates. As a result, it is more important than reasonable to reduce the minimum deposit that Canadians must have in order to secure a mortgage without insurance.
I would also like to say that from the outset Canadians must place their trust in government to provide adequate consumer protection. Last year, however, the Conservative government shocked the nation with a devastating announcement that brought a key election promise.
On October 31, the Conservative government dropped a bombshell on Canadians by imposing a new tax regime on publicly traded income trusts. The effect on Canadian markets was devastating, resulting in the permanent loss of well over $20 billion in wealth, most of it at the expense of Canadian seniors who were relying on income trusts for day to day living expenses.
Worst of all, Canadian investors were lured by a Conservative election promise made by the current Prime Minister. In the middle of the last election campaign the Prime Minister said, on December 9, 2005, “A Conservative government will never raid seniors' nest eggs by taxing income trusts”.
Canadian investors took the Conservatives at their word and put more and more of their life savings into income trusts, making this the fastest growing sector on the market, all until the Prime Minister broke his word to Canadians. Sadly, Canadians are learning the hard way. The Conservatives are more than willing to betray election promises without any regard for the damage done to thousands of seniors who worked hard for their life savings only to have it wiped out with the stroke of a pen.
This is a sample of one of many letters and emails that I received from my constituents of Don Valley East. It states:
The damage done to the value of my investments in income trusts is devastating. I have incurred a 20% decline in value. It is my sincerest wish that an election will be held in the very near future and that the majority of Canadians will not re-elect your party. This is a very sad commentary and one I wish was not necessary to write. However, I have definitely lost my confidence in your party's approach to fair treatment of its citizens, particularly seniors of which I am one.
The current Prime Minister knew how much seniors were depending on income trusts and yet he was determined to break his word. With one hand the government has swiped billions from seniors through their income trust savings and with the other offered very little in the form of income splitting. In fact, some have construed this pension splitting to be income splitting. It is not.
Pension splitting will do little to curb poverty among seniors and even less to alleviate the huge losses they have suffered as a result of the Conservatives' broken election promises. Hundreds of thousands of single seniors, the majority of them women, will not see a penny from this policy.
I am pleased to support Bill C-37 at this stage. I am glad to see that the Conservatives are continuing to implement the Liberal agenda on so many fronts. It is, after all, the same Liberal agenda that saw Canada make a complete economic U-turn after years of Conservative fiscal mismanagement. It was not long ago when the Wall Street Journal referred to Canada as a third world economic basket case because of the damage done by the previous Conservative government.
Thank goodness the Liberal Party was able to come to power to eliminate Mulroney's $42 billion deficit, balance the books for eight straight years, while offering Canadians the biggest tax break in Canadian history.
I sincerely hope that Canada's alleged new government will continue to use our ideas to their fullest and can refrain from returning to the dangerous incompetencies of the previous Conservative government, which was so damaging to Canada's economic well-being.
Ken Epp Conservative Edmonton—Sherwood Park, AB
Mr. Speaker, the member made the same error that previous Liberals made when she tried to attribute the debt and the deficit to the Conservatives. First, I will state my credentials. I am a math type guy. One of the things I learned was some math and finance. It is a very elementary computation, which we have all heard, called compound interest.
Let us take the debt in 1984, which the Conservatives inherited from what the Liberals had done in the previous 14 years, from 1970 onward, and set it aside. When the Conservatives were defeated and the Liberals took over in 1993, that debt, by plain, simple compound interest, would have grown to the amount that it was in 1993. I do not know those numbers in my head right now, but I remember having computed it because I was challenged on that fact. It turns out that at the going interest rate, this is exactly what happened.
The debt we still have is the heritage of those years under Trudeau. When Mr. Jean Chrétien was the minister of finance, he had record breaking deficits. That is what drove us into debt in the first place, and we are still suffering from it all these years later.
The Conservatives, on the other hand, put some measures into place to try to address that. When the Liberals came back to power in 1993, those measures were in place and they were able to address the issue, and we were very glad they did. In the Liberal way, they could have found new ways to squander the money again. We are glad they did not.
Yasmin Ratansi Liberal Don Valley East, ON
Mr. Speaker, I am an accountant by trade and economics is my forte. If what the hon. member is saying represents his party's position, then we are in a real bad turn. We are going to go into a deficit because they do not know economics at all.
In good economic times, if we cannot balance the budget, if we keep on giving eight consecutive deficits, how can we do anything in bad economic times? The economy that the Liberals inherited was devastated. We were called a third world country, a basket case. If the Conservatives were such good economic managers, why could they not turn the ship around?
We inherited $42 billion in deficit, $500 billion in debt and we were able to manage. We also gave the Conservatives $13 billion in surplus. They cannot beat that record and we do not want the country to go into deficit again.
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, the NDP spokesman came before the House to deal with the bill, but then proceeded to talk about a range of other things, which I suppose now is relevant to the debate. One of those issues has to do with the fact that the finance minister, when he presented information before the committee, turned out to be no information.
On the matter of income trusts, Conservatives still have not explained where they got the tax leakage. They still have not responded to the expert witnesses about the flaws in the methodology of computing the tax leakage. That is not transparency, openness and accountability, upon which this bill rests.
I raise the matter for the member's comment. Have we seen with this bill, which only received three hearings days and a few hours of debate in the House, a bill dealing with 12 different acts, a comprehensive enough review for a process which is transparent, open and accountable?
Yasmin Ratansi Liberal Don Valley East, ON
Mr. Speaker, something which I find quite unethical is the behaviour of NDP members in this, especially in the area of income trusts. They have made spurring allegations, they have spoiled reputations and yet they do not have the courtesy to apologize. They have to apologize for the leakage, for getting the RCMP to do things, when they knew full well. They spoiled the reputation of the former finance minister. Even more galling is the NDP went to bed with the Conservatives and destroyed everything that was so important to Canadians such as the Kelowna accord, the child care agreement, Kyoto, the Status of Women. They then claim to be advocates for small people. They claim advocacy and transparency. I do not believe it. They are duplicitous.
Pat Martin NDP Winnipeg Centre, MB
Mr. Speaker, the banks are given the exclusive monopoly for a variety of very lucrative financial transactions such as credit card exchanges, cheque cashing, et cetera, in exchange for providing basic services to all Canadians. That is the nature of their charter. A lot of people do not realize that there is some reciprocity and some obligations there.
I would like my colleague's views on this. In my riding of Winnipeg Centre, the five big chartered banks have closed 15 branches in the last five years. Neighbourhood banking, as we used to know it, is gone, leaving a service vacuum that is being backfilled by ripoff payday loan artists, pawn shops and fringe banking of every variety. These payday lenders are like a scourge in my community. They are sucking the life right out of my community, in a financial analogy, because they are preying on poor people who are being denied basic financial services by the big banks.
My colleague finds fault with the comments of my colleague from Winnipeg North Centre, who is experiencing the exact same circumstances as I in Winnipeg Centre, where banks are completely abandoning their obligation and duty to provide basic financial needs. I do not understand for whose side she is advocating. I do not understand why she is being critical of my colleague, the finance critic for the NDP. We are simply pointing out that the general public needs some representation in the House of Commons when it comes to the service they get from the big banks.
I really have to wonder whose side members opposite are on sometimes. The banks have plenty of apologists. They have apologists coming out of their yin-yang from both business parties. Only one party has been trying to advocate on behalf of the end user, the consumer who is not being served well by the banking system and by the big banks. The big banks have a lot to answer for.
In the Bank Act it specifies under what circumstances banks may close branches. The tests, when we read them on the face of it, are quite high. They cannot close branches because they are not profitable. They have to view their profitability overall, and their profitability is not wanting with a $19 billion surplus. Profitability is not justification for closing a bank branch. They then have to provide alternate subsequent services to those long term clients to keep up their end of this trust relationship that they enter into with Canada.
Does my colleague agree that the Bank Act should be strengthened to curb banks from abandoning small town Canada, inner city Canada? Does she also agree that if the banks continue to disregard their obligations under their charter, we should tear those charters up? We should scrap the idea of chartered banks. Botswana did it. It kicked them out, left it open to competition and let the chips fall where they may.
The Acting Speaker Conservative Royal Galipeau
The hon. member for Don Valley East should know there is half a minute to respond.
Yasmin Ratansi Liberal Don Valley East, ON
Mr. Speaker, I share some of the concerns. There are guidelines. There has been no amendments to the consumer protection area. There is the ombudsman aspect of it, where they can go. In my riding if the bank tries to close, it merges its two branches together and there is consultation. That is the answer I can give in half a minute.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, I am very pleased to speak today to Bill C-37. This bill is the mandatory review that is provided for regarding the operation of the banking system. Every five years, we have to review that piece of legislation to try to make it as functional as possible and to adjust it to changing technology. The Bloc Québécois will therefore be voting for the bill, because even though it is not perfect, it does contain significant improvements.
First, Bill C-37 institutes mechanisms for disclosing information to consumers, so that they will be able to make informed choices regarding the banking services they use. We all know that, historically, banking services have not always been models when it came to providing information to consumers. People did not find it easy to understand and it was very difficult to compare one bank to another. There are improvements in the bill that will allow people to get this kind of information, and this is a benefit for consumers.
Second, the bill will establish the regulatory framework to allow for digital data to be used in cheque processing, which will reduce the time that cheques are held by banking institutions. A new technology has been adopted, and this means that a cheque will be frozen in a banking institution for less time. This provides a benefit for the consumer and an important benefit for small and medium-sized businesses, which often have to wait until a cheque is released before it becomes available and can be cashed. It will facilitate both business operations and everyday management of family and individual budgets. In this respect, it is a practical application of a technology.
Third, the bill will reduce the regulatory burden for foreign banks, credit unions and insurance companies, to make the regulatory compliance mechanisms more efficient. For example, credit unions that have fewer people and that apply to do this will be recognized. As for foreign banks, the aim is for there to be more competition because a lack of competition is a problem in the Canadian system. In regions like the one I represent, bank branches have disappeared, one after the other, in recent decades.
At present, I can tell you that the Desjardins movement is represented, as is the National Bank of Canada and a few other banks, but those institutions cover huge geographic areas. The way that the rules about loans to businesses or individuals are applied, for example, increasingly fails to take the local situation into account and is increasingly often no more than a mathematical financial calculation. From that perspective, even the disappearance of the banks has an effect on how credit unions operate, because the banks' focus on profitability at any cost has prompted the Desjardins movement, for example, to review its structures with a view to that fact.
We have to find solutions to the lack of competition, solutions that may lie in providing foreign banks with market entry conditions that enable them to offer services so that ultimately the consumer wins. This should be done, on condition that appropriate operating rules are obeyed and also that we ensure that in terms of employment spinoffs, jobs are not simply being exported abroad. On that point, the amendments in the bill are acceptable, and are even attractive.
Fourth, the bill aims to amend the rules governing mortgage loans, thereby enabling more people to take advantage of that financial tool. A previous amendment has already increased the percentage that could be obtained without an insurance guarantee. This bill aims to increase it to 80%.
Lastly, the government is increasing the equity threshold from $1 billion to $2 billion, thereby making it possible for a single shareholder to wholly own a bank, and thus encouraging new competitors on the market. I mentioned that earlier. We need to ensure greater competition. This measure aims to move forward in this area.
The Bloc Québécois wants to ensure, however, that the amendments to the regulations do not allow the kind of uncontrolled mergers and acquisitions we have seen before in the banking sector. I have been a member of this House for about 12 years and we have seen all kinds of situations in terms of bank mergers. Under the former Liberal government, during my first few years as a member here, there was greater willingness to allow this. Systematic opposition from the Bloc Québécois, other parties of this House and civil society made it possible to ensure that there were no uncontrolled mergers and, that, at the end of the day, there were no fewer intervenors.
Canada currently has five major banks. If that number had decreased to only two, clearly, there would have been less competition. If we do not open the market up externally at the same time, we would be creating a duopoly, and we certainly do not want that to happen.
While the committee was studying the bill, we wanted to make sure that we continued to look at this issue to avoid unrestrained mergers.
Speaking of mergers, we demand that any amendment to the moratorium on bank mergers be made in the best interest of citizens, not just to make the financial markets happy. There is an unfortunate tendency in this sector to see this activity as being the sole province of economic players, but clients, consumers, citizens, have the right to know how these things work. We must ensure that the mechanism gives everyone a fair chance and that we have a stable, structured system that fosters real competition. In that respect, the Bloc Québécois will ensure that the committees hear all relevant witnesses so they can make good recommendations.
That, in a nutshell, is the Bloc Québécois' analysis of this bill.
I would also like to talk about promoting consumers' interests by improving the information disclosure regime. A lot of progress was needed on this issue. For example, institutions will be required to clearly disclose their information on the Internet, in all branches and in writing to anyone who asks. This is a major change to the way banks do things, a change that we applaud. We hope that this will come to pass and that the banking system will become more democratic.
We also want to change the regulatory framework to enable the implementation of digital imaging. The legislative framework must therefore allow digital imaging in order to facilitate the cheque cashing process and to reduce the length of time banking institutions can hold cheques, as I mentioned earlier.
We must also reduce the length of time banking institutions can hold cheques directly, because following the publication of the 2006 Financial Institutions Legislation Review, the government promised to reduce the cheque holding time to make life easier for SMEs and other citizens. Bill C-37 gives the superintendent the authority to limit the length of time for which cheques can be held. We will see how that works out in practice.
The white paper proposed an immediate reduction of the maximum hold time to seven days, and to five days once the digital cheque imaging system is in place. We will see how this works.
Cheque holds affect not only consumers who need to have access to those funds to pay their bills, but also small and medium businesses that must pay their employees and keep the business operating out of the funds they deposit.
There are currently cash flows because of how quickly businesses are operating and because of the introduction of just-in-time systems. Financial flows need to be just as quick. In that sense, the improvement to the bill should help businesses.
The government wants all users of the payments system—including consumers—to benefit from the increased efficiency resulting from the Canadian Payments Association initiative that involved changing the payments system to facilitate electronic imaging of cheques. These changes must do more than just improve profits. We must ensure that the services are adequate and that the savings are passed on to the consumer.
The second objective is to increase legislative efficiency by lightening the regulatory burden on foreign banks so as to facilitate their access to the Canadian market and stimulate competition.
Competition exists. However, certain problems were raised concerning the regulations governing foreign banks. This bill aims to clarify the measures applying to foreign banks operating in Canadian territory by refocusing the regulatory framework on the chartered banks and simultaneously excluding the near banks.
The near banks are companies that offer banking-type financial services. Unlike chartered banks, near banks cannot change their basic money supply, that is, they cannot borrow money from or lend money to the Bank of Canada to make new deposits or new loans.
Still in the same section, a second measure aims to improve legislative efficiency and streamline the regulatory approval regime. We want to ensure that decisions that do not impact public policy, as provided for in the legislation, are in the hands of the superintendent.
In the opinion of the Bloc Québécois, the minister must not be permitted to depoliticize operations that will have an impact on public policy. We have to make sure that the minister continues to assume his responsibilities. Given the current practice of the Conservative government of not wanting to intervene in the economy, such a caution is quite justified.
The bill also relaxes the federal framework governing credit unions. For example, in order to facilitate the opening of new credit unions, the government would lower to two the number of institutions required to constitute a credit union. At present, a minimum of 10 credit unions is needed to establish an association under the Cooperative Credit Associations Act.
Still, in light of the new commercial possibilities offered by retail associations and ongoing consultation in the cooperative credit system, the current entry threshold is too high. This is why the amendment corresponds to the market reality, which seems to be an advantage. This would increase this sector’s ability to adapt to new developments and better serve consumers and SMEs.
The third objective of this bill would increase from 75% to 80% the loan-to-value ratio for which insurance is mandatory on residential mortgage loans. This ratio was set over 30 years ago. It is a cautionary measure designed to protect lenders from fluctuations in property values and payment defaults by borrowers.
The last time this ratio was changed was in 1965, when it was raised from 66% to 75%. But the marketplace has changed since then. Lenders’ risk management practices have improved, risk-based regulatory requirements concerning capital have been implemented and the financial markets have changed and stabilized.
Finally the supervisory framework for federally-regulated financial institutions has been strengthened. So it seems that the restriction no longer plays the same role with respect to caution. A cautionary provision requiring borrowers to take out mortgage insurance at a loan-to-value ratio set at 75% might mean that some consumers are paying more than necessary for their mortgage.
The second part has to do with readjusting the equity thresholds, which would allow sole ownership or to force wide ownership. They also want to increase, from one third, the minority limit on the number of foreign directors on the boards of Canadian banks. There is an array of measures, therefore, intended to make the banking system work better.
As I said at the outset, my fellow citizens and the electors in my riding are very concerned about the availability of bank services. The banks have undertaken some major offensives over the last few years and have invaded the insurance market, for example. The insurance brokers came up with a strong response to show us what a negative effect this would have had on regional development.
The Bloc Québécois believes that this bill, generally and overall, improves the way the bank system works.
Obviously, there are still some basic questions. However, in view of the fact that the act will have to be reviewed within five years and the government has already offered an additional six-month period ending April 24, we should definitely pass this bill and hope that ultimately the government will listen to what the Bloc has to say. We will continue to monitor these matters.
I want to conclude with the question of bank mergers. This is an area where the federal government's actions have lacked transparency over the last few years. They have gone back and forth and even hidden a document for a few months on the pretext that since we have a minority government, it might have been damaging to make it public. In the meantime, life goes on.
I think that it is good to have an open public debate in a sector like this. We should take a global view now of the measures we are taking and the corrective steps we want to take, to ensure there is genuine competition and we do not just end up creating duopolies.
Foreign banks can come and compete, just as the Canadian banks can make foreign purchases. Globalization in itself is not a bad thing, but we need to ensure that it is done in a way that leaves us winners.
The federal government has often neglected to use all the tools at its disposal, including the safeguards enabling industrial sectors such as the apparel and textile industries to protect themselves, to have a transition period. This was not done in these industries.
With regard to Canada's banking system, which has grown along with Canada, it is solid but it must adjust to new global realities. It must be given the requisite opportunity to serve consumers adequately. In this regard, there are still improvements to be made in terms of the transparency of information available.
I am anxious to see whether or not the clauses of this bill that pertain to disclosure of information to consumers, will be applied correctly and if the banks will provide the maximum amount of information. In the end, the Bloc Québécois will be able to see whether or not results are achieved.
In any event, this is an on-going process. We will have to re-examine this legislation to ensure that it always reflects the market reality. However, at present, the Bloc Québécois thinks it is a good thing to vote in favour of this bill, which makes certain improvements to our banking system. We hope that the banking system will be of benefit to our entire economy and that, in particular, it will address the lack of service in areas outside of major centres, in the rural areas of Quebec and Canada. In this regard, the banking system needs to pay more attention to our citizens.
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, this particular bill amends some 14 acts and I believe there are some 450 amendments to a variety of these bills. Interestingly enough, there were a few hours of debate at second reading and three hearing days in committee where witnesses came forward to talk about some of the aspects of the proposed changes. There were a handful of changes made at committee and now we are going to have another few hours of debate. This happens every five years.
I am not sure whether the member agrees, but it would appear to me from the debate so far that a number of issues have been raised by members that are beyond the scope of this bill. There was no opportunity to have consultations with parliamentarians on behalf of their constituents to talk about issues relating to things like bank mergers, more information for consumers, foreign banks, and small and medium sized business loans and their impact.
There are so many issues that come up when we talk about this and yet it is almost impossible to deal with a 230 page act and 450 amendments. If we do not have the acts that they in fact amend, everyone will understand how difficult it is to even follow the document. We have to rely so heavily on others.
My question to the member is whether there should be consideration given to changing the way in which we view the amendments to the Bank Act and other financial institutions, so that all of the other kinds of items and the full exploratory discussions can take place so there can be influence on the content of the amendments coming forward to Parliament for discussion?
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, I listened with interest to the comments made by my colleague, and I think that some action can indeed be taken. First, as members of Parliament, we must be aware that the act is reviewed every five years and that we can start again, as soon as tomorrow morning, to make some contacts and make proposals to the government.
Instead of waiting four and a half years or almost five years to undertake the review of the act, the government would be better to do so rapidly after three years. We should ask the committee to study the issues and we should give ourselves some extra time, so we can study the situation as a whole.
I agree with my colleague that many constructive proposals come from witnesses and members of Parliament. What we find in this bill are the main technical points that were agreed to so that the bill would pass here without confrontation. Indeed, we are very close to the limit and the original five-year deadline to review it, as provided in the act, has expired.
We should give ourselves this responsibility because there are important issues, such as mergers, information for consumers, new markets and foreign banks. These are realities that will change every six months in coming years. We should not wait five years before making proposals for the new reality.
I would invite the hon. member, as well as all members in this House, to work on this as soon as possible, so that all our fellow citizens are aware that this is an evolutionary system and that, if constructive proposals are made, we will be able to change the system accordingly. To this end, we must break through the indifference that we see sometimes in our constituents towards the possibility of influencing our action. I think that this is a concrete example of this possibility.
The Acting Speaker Conservative Royal Galipeau
We will now go to statements by members. When the study of Bill C-37 resumes in the House, the member will have six minutes left for the period of questions and comments.
Bill Casey Conservative Cumberland—Colchester—Musquodoboit Valley, NS
Mr. Speaker, when CN Rail workers took strike action recently major employers in my riding were forced to face critical decisions. Important supplies and raw materials normally received by rail for their operations could not reach them.
Mr. Jim Vena, the vice-president of CN's Champlain Region, which includes my riding, and his general manager Tony Marquis and his team took action for our companies.
This crew managed to find us trains where there were none to be had and their team also found wayward railcars moving from the United States and the west.
I am very grateful to Jim and Tony, and to the other CN officials who helped ensure that the impact of this labour action was far less than we had feared. We sincerely appreciate their efforts.
We also hope that this labour dispute soon comes to a positive conclusion. I encourage all union members to return to work and cast their ballots on the interim agreement.
Gurbax Malhi Liberal Bramalea—Gore—Malton, ON
Mr. Speaker, the recent increase in the price of gas and the shortage of fuel available to gas station outlets and consumers are having a deep impact on the most heavily populated and diverse part of Canada, the GTA, which is also the economic engine of Canada.
What makes the government inactivity on this issue even worse is the fact that these outrageous prices and shortages are happening during the winter.
This government boasts its close ties to the Canadian oil industry, while it also claims to act in the best interest of average, hard-working Canadian taxpayers.
If the government truly wants to live up to this claim, I strongly urge it to take immediate action to remedy this dangerous situation before Canadian industries and working class Canadians are hurt any further.
Diane Bourgeois Bloc Terrebonne—Blainville, QC
Mr. Speaker, today I would like to salute a citizen in my riding who has been helping troubled teens for more than 10 years.
Over the years, Gaétan Innes, a street worker in Terrebonne, has been a friend and confidant to those who are far too young to become homeless.
Mr. Innes is very involved in his Les Moulins community. An outstanding model of courage and altruism, he represents hope for these young people who are facing difficulties that seem insurmountable. My Bloc Québécois colleagues and I salute Mr. Innes, who is fighting for the rights of the homeless, and we want him to know how proud we are to be representing him in the House of Commons.
David Christopherson NDP Hamilton Centre, ON
Mr. Speaker, tomorrow marks the first anniversary of the Six Nations land claim dispute in Caledonia. This situation has caused tremendous hardship and upset for all the people involved.
The root of this problem is the chronic buck-passing between the federal and provincial governments. Even the federal fact-finder, Professor Michael Coyle, said that a solution will not be possible until the federal Conservatives and the provincial Liberals resolve their own differences over land claims.
Recently, Professor Coyle said that the existing process offers no adequate mechanisms for resolving the disagreement. Intergovernmental squabbling will not get the job done. It will not settle this claim and it will not heal this community.
The Canadian Constitution makes it clear that the federal government has the sole responsibility for dealing with land claims. A successful conclusion rests with the federal government and the Conservatives have not been up to the job. They did not get it done.
It is the lawful, moral and ethical duty of the Conservative government to end this nightmare, so that peace can return to all the people of Caledonia. One year is one year too long.
Luc Harvey Conservative Louis-Hébert, QC
Mr. Speaker, in the riding of Louis-Hébert, there is a private teaching institution called the St. François school. This school has over 200 students with special education needs, students who have been referred by school boards in the region that do not have the necessary resources to meet their needs.
The school is run by the Centre psycho-pédagogique de Québec, a foundation set up to ensure its survival.
The foundation is the work of Jean-Marie Guay, who, for 33 years, has provided expert leadership to the school and the foundation, the Centre psycho-pédagogique de Québec.
Mr. Guay is an expert special needs educator who deserves our admiration, and I am proud to highlight his unwavering devotion to and involvement in improving the lives of young people with academic difficulties and facilitating their integration.
It is my honour to congratulate and thank Jean-Marie Guay for being an outstanding citizen and to thank him for being so involved in the riding.
Michael Savage Liberal Dartmouth—Cole Harbour, NS
Mr. Speaker, Nova Scotia has lost two strong, compassionate, community-minded women in recent days.
Sylvia Lawton died on February 12 after a lifetime of significant accomplishments. She was a powerful force, a long-time educator, and a political powerhouse who was a leader in the PC Party for many years until its disappearance in 2003.
She will be missed by her whole family, especially Jim, and by all of Dartmouth.
This past weekend saw the passing of Pauline Fitzpatrick. Her life was devoted to her husband Ed and her five children and 11 grandchildren, but her community also benefited from her talents and dedication. She was a talented musician and a nurse, and she supported her family through home and school associations and our local parish of St. Agnes. She was a kind, loving woman whose faith was both evident and pre-eminent throughout her life and provided both her and her family much comfort at the end of her life.
Ed, Anne-Marie, Joe, my dear friend John, Mary Elizabeth and Andrew, as well as the grandchildren and dear friends like Anne-Marie MacDonald, have been touched by her grace, elevated by her courage and blessed by her life of serving others.