Mr. Speaker, I must thank my colleague from Laval who has just spoken with such eloquence that it will be difficult for me to follow her example during the next 10 minutes. She has very well described the debate and exposed the problem with Bill C-26, while defending the interests of Quebec, of Quebeckers, and of those unfortunate Canadians who are obliged to rely on these kinds of payday loans across the country, but not so much in Quebec. I will have an opportunity to explain that during my remarks.
I am pleased to be able to speak to Bill C-26 for the purpose of condemning it. This bill amends the Criminal Code with respect to a criminal interest rate and seeks to regulate the payday loan industry.
While on the surface it may appear praiseworthy, the bill contains what is known as a hidden defect. I imagine that among the 308 members of this House, there are some who know people who have bought a house and discovered after several weeks or months that the vendor had hidden, knowingly or otherwise, some defect in the house. In the end, those people realize that they should not have paid so much for their home. That is what is known as a hidden defect.
It is the same thing with this bill. Upon initial examination, it appears to be good. However, we notice that there is a serious problem that, in my opinion, has unfortunately been seen over and over, ever since the Bloc Québécois has been here in this House, and which probably also existed before our arrival. Mr. Speaker, during your time in office, I imagine that you have heard these arguments all day long throughout the parliamentary session. Once again, it is an invasion by the government into the jurisdictions of Quebec and the provinces. There is the problem. There is the hidden defect in Bill C-26.
Obviously, for political reasons, they will say that we are in favour of this kind of industry and that we do not want to help unfortunate people to escape from this trap, and so forth. Let it be clearly understood that we recognize the need to attack this new form of exploitation of the most vulnerable workers. We do not dispute that goal; far from it. However, why should the federal government control what Quebec already does well and, in fact, does better than what the provisions of this bill would bring about?
That is the problem. As my colleague from Laval said earlier, the Prime Minister, because of his veto, can decide to impose whatever he wants in this regard on Quebec and the provinces. Obviously, this is a serious problem.
As I said, there is nothing inherently wrong with wanting to regulate the payday loans industry more closely; it is a good thing. However, the way in which it is being done is still problematic in our view. It must be pointed out that the provisions in the Criminal Code and the Interest Act do not at present specifically regulate this new form of loan, which actually came into being in the 1990s. This is quite a recent practice. It is therefore reasonable for this Parliament to want to put some thought into the question. This is a fact of life—these payday loans we are all talking about—that is affecting growing numbers of western countries, including Canada.
Today—and this was undoubtedly less common in the past—a person can have a regular job, a wage, but still be living in poverty. This is a fact of life today, even in 2007. People have to use the services of these companies, whose practices may be questionable, including the high cost of loans, unfair collection practices and high interest rates. This what a person has to deal with when they do business with this kind of company. When someone starts to use the services of this kind of business, they are often taking the first step in the vicious cycle of poverty. It is not just an individual who suffers as a result; an entire family may suffer from this situation.
In my opinion and the opinion of the Bloc Québécois, the government should put some thought into this phenomenon rather than infringing on the jurisdictions of Quebec and the provinces. A few days ago, my colleague from Trois-Rivières said that she had looked into this matter. She also gave an excellent speech on Bill C-26 right here in this House. She cited statistics released by Statistics Canada, from which we learned that there are in Canada, at present, 1.3 million more poor households than there were 25 years ago. The government has failed to stem this epidemic of poverty, if you will forgive the expression; the opposite has occurred. The fact that there are growing numbers of poor people is one of the consequences of the proliferation of this kind of business. In Canada, 1,300 of these companies have been identified. There are very few in Quebec.
That is why we have to make a distinction, with what is happening in Quebec at present and the reason why we do not want the federal government to stick its nose into what is happening in Quebec. Quebec has succeeded in stemming the problem of the proliferation of these businesses.
There is also the Canadian Payday Loan Association, with 22 member companies that currently manage 850 service outlets throughout most of Canada. At present, there are none in Quebec.
In the past there has been this sort of company in Quebec, as elsewhere. There used to be even more of them in Quebec. That is why at some point the police, with the help of the Office de la protection du consommateur du Québec, decided to look into it. It was a chance to clean up these companies, especially those involved in loansharking, and they disappeared. That does not mean that pawnbrokers do not exist. Unfortunately, again because of poverty, people are forced to take their precious belongings—a television set, a sound system or even their children’s sports equipment—so that they can get a bit of money to buy groceries some weeks. It is easy to imagine what happens because of the high interest rates if the money is not paid back. People unfortunately lose their valuable item.
This still exists and it is too bad. We should look into it and also make sure that these people are not involved in usury.
Quebec has already put in place some tools to oversee and regulate this sort of industry by means of its Consumer Protection Act. Under this law, the interest rate must be indicated in loan contracts, and all charges are included in the annual rate. Charges for opening a file, for forms and so on cannot be added on. Jurisprudence has also established that annual rates of interest above 35% are excessive. I would remind the House that the current Criminal Code sets this rate at 60%. In Quebec, it is set at 35%.
The first thing Bill C-26 does is enshrine the definition of payday loan in the Criminal Code. The exemption mechanism—and that is where the problem lies—is twofold in design. First a province must be designated by the federal government in order to be exempt from the application of section 347 of the Criminal Code and section 2 of the Interest Act so that they do not apply to its payday loan industry. To be designated, the province must apply and meet certain conditions, those infamous conditions. Such designation may also be withdrawn unilaterally when the conditions are no longer met to the liking of the federal government. Another example of Ottawa knows best. This is the precisely where the problem with this bill lies. The member for Sault Ste. Marie said earlier he did not see any problems with this bill, but this is where there is encroachment on the provinces’ areas of jurisdiction.
I would like to remind the members that the Bloc Québécois is defending the Government of Quebec's position. Quebec's government believes that by making an exemption subject to compliance with the conditions, the federal government is clearly encroaching on a provincial area of jurisdiction. As I said earlier, Quebec is already regulating this industry without having to report to the federal government. I would like to remind the members that Quebec's maximum interest rate is 35%, not 60% as set out in the Criminal Code.
We are against Bill C-26. That said, we are not against it because we support payday lending, a business that, unfortunately, is proliferating almost everywhere in Canada but less so in Quebec. That is not the case at all. We are against it, but we believe that Quebec has the right to regulate the commercial practices of businesses within its jurisdiction, and that the federal government should not veto this in order to apply the legislation.
The federal government certainly has the power to set the maximum legal interest rate. However, it does not have the jurisdiction to regulate industries' business practices.
In closing, thanks to its Consumer Protection Act, Quebec already regulates this industry and prohibits unreasonable practices. That is why we find that Bill C-26 offers nothing new or good for Quebec, which is already equipped to deal with this situation. We do not need the federal government's veto or its encroachment on another area of jurisdiction. Enough is enough.