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.


Bank Act
Government Orders

1:35 p.m.


Paul Crête 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.

Bank Act
Government Orders

1:55 p.m.


Paul Szabo 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?

Bank Act
Government Orders

1:55 p.m.


Paul Crête 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.

Bank Act
Government Orders

1:55 p.m.


The Acting Speaker 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.

CN Rail
Statements by Members

1:55 p.m.


Bill Casey 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.

Gasoline Prices
Statements by Members

February 27th, 2007 / 2 p.m.


Gurbax Malhi 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.

Gaétan Innes
Statements by Members

2 p.m.


Diane Bourgeois 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.

Aboriginal Affairs
Statements by Members

2 p.m.


David Christopherson 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.

Jean-Marie Guay
Statements by Members

2 p.m.


Luc Harvey 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.

Sylvia Lawton and Pauline Fitzpatrick
Statements by Members

2 p.m.


Michael Savage 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.

Edmonton Oilers
Statements by Members

2:05 p.m.


James Rajotte Edmonton—Leduc, AB

Mr. Speaker, I rise today to pay tribute to one of the greatest Canadian athletes of all time, Mark Messier, whose number 11 is being retired tonight by the Edmonton Oilers.

Hockey fans will remember his talent, especially his patented play of picking up the puck in the neutral zone and, at full speed and on his off wing and from an impossible angle, releasing that deadly snapshot past the goalie into the far side of the net.

An individual is not supposed to score goals like that, but Messier did, for an incredible total of 694 goals over 25 NHL seasons. He is second overall in regular season points, playoff points and number of games played in the NHL, a testament to his vast talent and incredible stamina.

He was talented and he was tough, but what defined him above all else was his will to win. He was and is a leader.

Tonight, the pride of St. Albert, Alberta returns home to Edmonton to receive the recognition and appreciation he so richly deserves. On behalf of all members of Parliament, I would like to congratulate Mark on all of his achievements and send best wishes to him and to his family on this special day.

Statements by Members

2:05 p.m.


Paule Brunelle Trois-Rivières, QC

Mr. Speaker, last Friday, Kruger announced that it will invest $200 million in its Trois-Rivières mill to build a de-inking plant, in order to position itself as a leader in the manufacture of paper from recycled fibre.

By exploring new niches, the paper manufacturer is boosting the long-term viability of the hard-hit forestry sector. The investment will create 200 jobs.

The de-inking plant will use a new technology to produce two grades of pulp that can be used to make newsprint as well as supercalendered and coated papers.

As the Bloc Québécois member for Trois-Rivières, I want to congratulate Kruger on its commitment to the economic development of Trois-Rivières and the surrounding area.

The Environment
Statements by Members

2:05 p.m.


Blaine Calkins Wetaskiwin, AB

Mr. Speaker, on February 14 and 15, I was pleased to attend the G8+5 Legislators Forum in Washington, D.C., where parliamentarians and industry officials representing over 70% of the world's GDP and over 70% of the world's carbon dioxide emissions met.

Unlike previous Liberal governments, Canada's new government has announced its commitment to participate fully in this forum. This government believes in taking global action on climate change and we believe we need to work together with our partners around the world to make this happen.

We think it is important to be part of a global approach on climate change because we need to include all countries in the dialogue, especially major emitters like the United States, China and India. That is why Canada's membership in this organization is so important.

This government recognizes the opportunity before us and is taking real action to bring achievable solutions to climate change. I look forward to working with my colleagues from around the world on this issue that is so important to Canadians.

University of Manitoba
Statements by Members

2:05 p.m.


Anita Neville Winnipeg South Centre, MB

Mr. Speaker, I would like to take this opportunity to congratulate my alma mater, the University of Manitoba, on its 130th anniversary.

Established on February 28, 1877, the University of Manitoba was western Canada's first university. Since then, the university has grown into one of Canada's largest medical-doctoral research-intensive universities. It offers 82 programs to its 27,000-plus students and has trained most of Manitoba's professional workforce.

University of Manitoba alumni include Rhodes scholars, champion athletes, political, business and community leaders, world-class researchers and academic experts.

The university serves as the research engine for Manitoba, bringing in $139.6 million in sponsored research income last year, ranking it number 12 out of the top 50 research universities in the country. The University of Manitoba's researchers are internationally recognized research leaders in the natural sciences, engineering, health sciences and the humanities.

I ask all members to please join me in wishing the university a happy 130th anniversary.

Anti-terrorism Act
Statements by Members

2:10 p.m.


Larry Miller Bruce—Grey—Owen Sound, ON

Mr. Speaker, tonight in the House MPs will have the chance to help in the fight against terrorism. Terrorism is not a conventional crime. It is for this reason that we as MPs should use our ability to provide law enforcement officials across the country with the specialized legislation they need to combat terrorism.

Many former Liberal MPs, including the former minister of justice, are speaking out in favour of extending the security measures and against their own leader's position. Today current MPs have the chance to follow their lead. Families of victims of the horrific 9/11 attacks, some of whom are here today, are asking opposition MPs to do just that and rise above partisan politics.

I believe it is the only sensible thing to do. I call on all MPs to lay down their partisanship and vote in favour of extending these critical provisions of the Anti-terrorism Act.