Mr. Speaker, I am pleased to participate at final reading of Bill C-37. The bill would ensure that legislation is changed to reflect the Bank Act review.
I have to say from the outset, as we heard repeatedly at committee, that this whole process and the legislation is a major disappointment to Canadians everywhere. We are talking about a fundamental issue pertaining to communities in this country, and that is the right to access community financial service.
We are dealing with a fundamental obligation on the part of our chartered banks. We are dealing with a situation where increasingly Canadians are feeling overburdened by the regulations and the charges of the banks without access to information so that they can make wise decisions.
We are dealing with communities everywhere, especially inner city, rural and northern communities, which are faced with branch closure after branch closure. We are dealing with people in communities who are then left to deal with payday lenders and other fringe financial institutions on a regular basis where, of course, they are subject to astronomical interest charges. We are dealing with people in communities who are left to access their hard earned money through ATMs, automated banking machines, for which they must pay dearly.
On every aspect in this whole area of banks and financial institutions, Canadians have not been served well by this legislative process. This is an opportunity we have every five years to review the Bank Act and to make necessary changes to ensure that we keep pace with Canadians' concerns and that we keep pace with changes in new technology.
We have not done that in the bill. We have failed Canadians dismally. Why? How did this happen? Let us start with the fact that by and large the dominant players in this process of review and study of the Bank Act are the big banks, moneyed institutions, and people and organizations with a heck of a lot of power and money.
It is pretty hard in that context for ordinary Canadians, for everyday working families, and for non-profit advocacy organizations to compete in that context. There is no money and support from this government to help balance out the equation. There has been no attempt on the part of governments, whether it is this one or the previous Liberal one, to actually ensure a level playing field to ensure that consumer groups and everyday Canadians could have a say in this Bank Act review process and be equal to the part being played by big banks, big insurance companies and moneyed interests in this country.
As a result, we have before us a very limited piece of legislation that tinkers with the system, does make a few necessary changes, granted, but misses the boat on the most pressing issues of the day in terms of banking and financial institutions.
If there is one shining light in all of this, if there is one silver lining in this process, it is the fact that because of the turbulent political times we are in, the present government and the former government have decided to pull back on their agenda to adhere to the banks' wishes for mergers, both in terms of banking institutions and cross pillar mergers.
It is a blessing that this minority situation we have been in for the last couple of years has slowed down the agenda of big banks and their mouthpieces here in Parliament. This legislation, thank goodness, does not include any reference or any permission to allow for bank mergers, nor does it allow for cross pillar mergers which involves the sharing and the merging of responsibilities around insurance.
That was a fear many of us had. Many small insurance brokers right across this country thought that the banks would win the day and gain control not only of every other area in the financial world but also of insurance, thereby putting out a lot of independent insurance brokers and leading to tied selling and lack of competition. One good thing about this bill is that is not in the legislation. However, that is about all I can say right now on the positive side of things.
What is so sad about this bill is what is missing in terms of the everyday lives of Canadians. There is nothing in this bill to make the banks accountable to Canadians and responsible for demonstrating why the banks deserve $19 billion in profits this year. We only have to look at the statistics to know that the banks are in a very stable and very lucrative position with better profits than they have ever enjoyed. On top of the huge profits that we see being earned by the banks, the CEOs of the major banks are being paid exorbitant, unbelievably high salaries.
A recent study by the Canadian Centre for Policy Alternatives documented that the salaries of CEOs at the big banks and big oil companies were so high and out of line that the CEOs could make in a few hours what many Canadians make in a whole year.
That has certainly been revealed to us by the recent decision of the Royal Bank of Canada. By the way, the bank was up 40% in terms of profits this past year. It brought in $4.7 billion in profits. The Royal Bank gave its CEO, Gordon Nixon, a 25% raise last year, up to $11.9 million, including a salary bonus of $5 million. Mr. Nixon receives a salary of $1.4 million, a bonus of $5 million and deferred shares and stock options valued at $5.5 million. That is up from $9.5 million in fiscal year 2005. The bank also contributed about $766,000 to Mr. Nixon's pension plan, compared with $620,000 a year earlier.
Never mind that the CEOs make in a few hours what Canadians make in a year; I think those CEOs make in a year what Canadians could never make in a lifetime.
It would not be so bad if we could actually get some accountability from the banks. That is the purpose of government. That is the purpose of legislation. That is why we are here: to scrutinize legislation to ensure that there is a level playing field and to ensure that Canadians are given some protections. I am afraid we do not find that in this bill.
Before I give some of the critiques of this bill on that front, let me also say that when it comes to the big banks we also know that many of these institutions are moving their money offshore to avoid paying taxes. Let us not forget the studies. I am referring to one that is a couple of years old, but I am sure its findings are still current. It was clearly reported that Canada's top five banks have deprived tax coffers of $10 billion since 1991 through offshore tax havens. Not only are banks making those kinds of profits, they are moving money offshore so they do not have to pay taxes on it.
And of course they were anxious to make sure that we followed the advice of the Liberals and kept the income trusts alive and well on our agenda so they could have these flow-through entities and not have to pay taxes. Let us keep that in mind as we hear the former Liberal finance minister criticize the New Democratic Party which had the strength of its convictions to stand pat and stand firm and to say from the very beginning that income trusts had to be phased out, that we needed to do everything we could to stop this tax leakage and to close all corporate tax loopholes. This is something that he and his colleagues did not do when they had a chance in government. Despite all the hot air today, we know on what side their bread is buttered and on whose side they stand when push comes to shove.
Let us also be clear that the banks have used much of their money to gamble on the international casino stage. Let us not forget some of the endeavours by CIBC and its ties to Enron. Let us not forget some of the scandals that our banks have been involved in. We have seen some of the profits squandered in terms of playing the casino game on the international scene.
I say all of this to make the point that in fact we have to do something as a Parliament to get control over the situation and to hold the banks to account. Reputation is important and the banks know that. I think their response by some of the big banks to our plea for a rolling back of the fees charged to people when they use ATMs is an indication that they realize they have a public relations problem on their hands and that they must begin to deal with it.
In speaking of the need for Canadians to have confidence in the banks, I would like to refer to statements by the Office of the Superintendent of Financial Institutions and to Nicholas Le Pan's statement not too long ago when he said:
There is no other basis for the financial services business than trust and confidence! And that goes to a firm's reputation and why reputation is a zero tolerance risk.
That is the message the banks need to hear from this Parliament. The banks need to be told that they are way beyond the zero tolerance risk level. The banks do not have the trust and confidence of Canadians. They do not have absolute loyalty to the very advantageous position of the banks today. This is what we have to change. That is why we are here. We are here to say that the banks owe it to Canadians to be accountable, transparent and open. There is nothing in the Bank Act and nothing in this legislation before us that requires the banks to do that.
It is interesting that according to the Financial Consumer Agency of Canada, which is authorized under the Bank Act, there are hundreds of violations, but do we know the names of any of the banks that have violated the Bank Act and violated the laws of this country? No. There is no obligation for the banks to come forward. There is no obligation on the part of government to give their names.
Consumers who want to shop around to get the best service available cannot get the basic information to do that. We could get it if we were buying a toaster. We could get it if we wanted to take a vacation. We could get it if we were buying a house. However, we cannot get the basic information to choose a bank. Canadians cannot get the information they need to make a wise decision--