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House of Commons Hansard #104 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was impaired.

Topics

Chief Electoral OfficerRoutine Proceedings

10:05 a.m.

Liberal

The Speaker Liberal Peter Milliken

I have the honour to lay upon the table the report of the Chief Electoral Officer of Canada regarding returning officers.

This document is deemed permanently referred to the Standing Committee on Procedure and House Affairs.

Industry, Science and TechnologyCommittees of the HouseRoutine Proceedings

10:05 a.m.

Conservative

James Rajotte Conservative Edmonton—Leduc, AB

Mr. Speaker, I have the honour to present today, in both official languages, the fifth report of the Standing Committee on Industry, Science and Technology in relation to our study on the challenges facing the Canadian manufacturing sector.

I would like to add that this is a unanimous report. I thank all members of the committee who put together this report.

Foreign Affairs and International DevelopmentCommittees of the HouseRoutine Proceedings

10:05 a.m.

Prince George—Peace River B.C.

Conservative

Jay Hill ConservativeSecretary of State and Chief Government Whip

Mr. Speaker, there have been discussions and I think you would find unanimous consent for the following motion. I move:

That members of the Standing Committee on Foreign Affairs and International Development be authorized to attend a conference entitled, A Dialogue on Canada's Approach to Democratic Development, in Ottawa on Thursday, February 15, 2007, and that the necessary staff do accompany the committee.

Foreign Affairs and International DevelopmentCommittees of the HouseRoutine Proceedings

10:05 a.m.

Liberal

The Speaker Liberal Peter Milliken

Does the chief government whip have the unanimous consent of the House to propose the motion?

Foreign Affairs and International DevelopmentCommittees of the HouseRoutine Proceedings

10:05 a.m.

Some hon. members

Agreed.

Foreign Affairs and International DevelopmentCommittees of the HouseRoutine Proceedings

10:05 a.m.

Liberal

The Speaker Liberal Peter Milliken

Is it the pleasure of the House to adopt the motion?

Foreign Affairs and International DevelopmentCommittees of the HouseRoutine Proceedings

10:05 a.m.

Some hon. members

Agreed.

Foreign Affairs and International DevelopmentCommittees of the HouseRoutine Proceedings

10:05 a.m.

Prince George—Peace River B.C.

Conservative

Jay Hill ConservativeSecretary of State and Chief Government Whip

(Motion agreed to)

Canadian Wheat BoardPetitionsRoutine Proceedings

10:05 a.m.

Conservative

James Bezan Conservative Selkirk—Interlake, MB

Mr. Speaker, I have three petitions to present today.

I have two petitions from farmers in my area who believe in the Canadian Wheat Board and wanted to ensure their voices were heard in the decision on the future of barley marketing by the Canadian Wheat Board.

The petitioners are asking the government to hold a plebiscite, which I am glad to say the government is doing.

Citizenship and ImmigrationPetitionsRoutine Proceedings

10:05 a.m.

Conservative

James Bezan Conservative Selkirk—Interlake, MB

Mr. Speaker, my next petition is from constituents in my riding who are concerned about Raza Kausar and his family who have taken refuge in the Crescent Fort Rouge United Church.

The petitioners are asking the government to intervene and provide compassionate intervention so the family can live a normal life here in Canada.

Undocumented WorkersPetitionsRoutine Proceedings

10:05 a.m.

Liberal

Mario Silva Liberal Davenport, ON

Mr. Speaker, I have a petition that calls on Parliament to deal with the issue of undocumented workers.

I had the opportunity in the last little while to again meet with people in the industry and they tell me that there is an incredible shortage of workers, particularly truck drivers. The industry needs about 35,000 truck drivers every year and there are not enough to fill that particular problem.

In addition to that is the issue of the construction boom that is going on in the Toronto, Vancouver and Calgary areas. The median age of construction workers is about 55 years of age. There is an incredible shortage right now and there will be for the future.

Unless the government deals with these issues and resolves the issue of undocumented workers and people who are already here and contributing to the economy, this problem will continue. We hope the government will find a humane solution to this problem.

Questions on the Order PaperRoutine Proceedings

10:05 a.m.

Regina—Lumsden—Lake Centre Saskatchewan

Conservative

Tom Lukiwski ConservativeParliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform

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

Questions on the Order PaperRoutine Proceedings

10:05 a.m.

Liberal

The Speaker Liberal Peter Milliken

Is that agreed?

Questions on the Order PaperRoutine Proceedings

10:05 a.m.

Some hon. members

Agreed.

The House resumed from February 5 consideration of the motion that Bill C-26, An Act to amend the Criminal Code (criminal interest rate), be read the third time and passed.

Criminal CodeGovernment Orders

10:05 a.m.

Liberal

The Speaker Liberal Peter Milliken

When this matter was last before the House, the hon. member for Mississauga South had the floor for questions and comments consequent on his speech. There are 10 minutes allotted now for questions and comments to the hon. member for Mississauga South. I therefore call for questions or comments.

Resuming debate. The hon. member for Sault Ste. Marie.

Criminal CodeGovernment Orders

10:05 a.m.

NDP

Tony Martin NDP Sault Ste. Marie, ON

Mr. Speaker, I am pleased to stand this morning to put a few comments on the record where this important public business is concerned.

I am particularly pleased to offer some thoughts on the bill and to support it given the journey I have been on over the last nine months across this province to speak with people in the communities about the issue of poverty. I have spoken with some of our more at risk and marginalized citizens about some of the challenges they face as they try to get on with their lives, buy the essentials, pay the rent, feed their kids and deal with the ever-changing financial circumstance that they find themselves in as governments cut programs, the economy changes and housing becomes more difficult to access while looking after children becomes a greater challenge.

At this time in our country we have these payday loan operations setting up in neighbourhoods all across the country. They are on every corner in the downtown area of most communities. The bill today tries to provide some regulation and direction.

The question we all need to ask is why people find themselves so desperate these days that they need to turn to lenders of this sort that charge the high rates of interest that we see in these instances.

As a party we have begun to focus, directly and in a disciplined way, on the whole question of fairness in our country at the moment. Why is it that those who are well off, well placed and have lots of resources at their disposal can get all the services they need to manage their lives while those who are less well off, have fewer resources or are less connected need to beg, borrow and steal? They are the ones who need to look really hard to find institutions that will actually lend them the money they need and will work with them around some of their needs. A large discrepancy exists there.

Why is it that our banking system, which was put in place, I believe, in partnership at one time with financial experts, governments and institutions interested in this public business and who were there to serve all of us, has come to a point where in many communities the only vehicle left for banking is either an ATM that charges people $1.50 or $2.00 to use it, or to go to payday loan operations which people, more and more, are flocking to as life unfolds.

It seems to me that somewhere along the line we have missed the ball. We have allowed our banks to become institutions that are no longer charged with the responsibility to service all of us who live, work and raise families in Canada and who try to keep body and soul together in communities in this wonderful country. The banks have become institutions of big investment and of very complicated financial dealings. They are less and less interested in the actual reason that banks were set up in the first place, which was to be a place where we could take the money out from under our beds and mattresses and put it some place where it could be dealt with in an organized and responsible fashion and given back to us when we need it.

The banks, in turn, were allowed to lend that money at an interest rate that would create some profit for them. They could invest it in ways that would allow them to continue to develop ways to be of service to us. Alas, that is not the case anymore.

The big banks are closing down branches all across the country and fewer services are being made available within the existing branches by way of tellers who we can walk up to, speak to and get advice from and by way of the hours of these branches. More and more people are being pushed out of necessity to access the payday loan operations. We in this place need to look at that.

What are we doing to challenge the banks to be more helpful? As I cross the country I talk to people about the emerging and very difficult circumstances of poverty in which many people live. The poor, oftentimes, cannot even open a bank account in some of the larger banking institutions. They need bank accounts to cash any cheques they might receive from government or from work they do but which pays them so little that the banks are not interested in their business.

We need to challenge banks in a way that will once again make them interested in the little accounts that so many of us, when we were younger or starting out, had at our disposal so we could write cheques or access loans whenever we needed them to maybe buy a house, a car or pay for our children's educations.

Literally hundreds and hundreds of people in every community I have visited, from Vancouver to Toronto, Calgary to Victoria, Castlegar to Penticton and Hamilton, are saying that because they cannot access these banking institutions, they cannot open a bank account and, therefore, cannot take advantage of the services those institutions are supposed to provide to all of us. In turn, they must now turn to the payday loan operations, the loan sharks who are all over the place in this country.

People who are paying those exorbitant interest rates for that money are finding themselves going deeper and deeper into debt to a point where they lose all hope of ever getting out of it without some serious and significant help from government and from those of us in communities who actually care.

It is good that we are here today and for the last while in this place discussing this issue because I actually do not know what people who are forced to access some of these service would do if these services were not available to them, which flies in the face of some of the comments that some of my own colleagues and people from every party have put on the record here over the last few days where this piece of business is concerned.

They are institutions that take advantage of people by charging these very high interest rates. However, on the other hand, I do not know where some of these people would go if they were not there.

It is good that we regulate. Some in that industry have asked for regulation because they do want to provide a service. They do want to act in good faith and to be controlled. They want control over those rogues in the industry who would give everybody in that industry a bad name and who are some of the people who are pointed to here and talked about in such derogatory terms, as I have listened to the debate.

However, if we, as a Parliament, are not going to take the banks to task and work through regulations concerning those institutions to actually provide to all Canadians the kinds of services that they need to manage their financial affairs, those who are most in need of those services, the most at risk and marginalized of our citizens, then I guess we need to look at where they are going for those kinds of services and ensure they are not again being abused.

That is why I stand today with my colleagues in the NDP, looking for fairness for families, working people and the at risk and marginalized across this country, asking that we at the very least bring the provincial governments in on this and that all of us find ways to regulate so that when people are desperate for money to cover the cost of the very basic elements of their lives they have some protection. We should not yet again, if only by default by not engaging ourselves in this kind of work that puts in place a protective regulatory regime, let down some of our neighbours, friends, family members and citizens across this country. We must make sure they are protected.

There is a bigger challenge, as I have already said, as far as this issue is concerned. As for accessing financing services and allowing people to have the ability to cash cheques quickly and to access small loans when they need them, we need to take a longer and harder look at the regulations that govern the banking industry in this country.

We have heard about the banking industry over the last few years as we or the government have tried to put on the brakes and pull back on the reins a bit as banks turn their attention to the international banking scene more and more and want to do mergers with other banks in other jurisdictions so that they can become even more engaged and involved in that higher level of financial activity. In doing so, they are forgetting the very basic reason that they were put in place.

I also want to say a word in support of an institution that is actually working very hard to try to pick up some of the slack, to fill some of the void, to paper over some of the cracks in the safety financial net that is out there: the credit unions of this country. These are institutions that in some instances were put in place, I would guess, because of the experiences of ordinary working men and women in this country in dealing with banks. To try to manage their own financial affairs, they came together, pooled their money and formed credit unions. All of us probably have at least two or three credit unions in our own communities, if not more.

In my area, in many of the small towns that I represent, where the large banking institutions have pulled out their branches, the credit unions have moved in. In some instances, they have taken over the buildings that the big banks were in and are now providing financial services. I want to give praise and great credit to our credit union system across this country, which, more so than the chartered banks, seems to understand why it was set up in the first place.

All credit unions have a board of directors made up of people who live in those communities. They hear very readily and regularly from their neighbours and friends as to what services are needed. They try as best as they can to fill that void. Alas, though, they cannot be everywhere. At the very least they have to cover their costs, and they have to try to put away some reserves for a rainy day or when a bad economy hits a particular community so that they can be helpful.

The credit unions provide the kind of service, and more and more of it, that is needed by the ordinary working man and woman and the ordinary working family in this country as they look for fairness and for access to services, because the big banks, frankly, are moving out of that business.

As well as regulating, we need some of these services that always will pop up when there is a demand. It is the nature of the market. It is the nature of our economic system and our political climate: where there is a need, somebody will come forward and fill it. I dare say that the reason some of these payday loan operations are doing the kind of brisk business that they are, and in many instances actually hurting and gouging people with very high interest rates that some folks will never be able to pay off or get out of, is that the big banking institutions in this country, which originally were set up to service all of us, have walked away in many ways from the ordinary man and woman in this country, particularly those who are marginalized and at risk.

These big institutions have done this at a time when they are paying their top executives exorbitant salaries. Top executives are getting million dollar paydays. At the end of every year, we hear banks announcing ever increasing profits. All told, for all of the banks together, I think it was $19 billion last year in record high profits.

We have to wonder about it. Even while banks make all of this money, there is the temptation to make even more of a profit next year because that is the way the economy seems to work these days. It is not acceptable any more for a corporation or a business to simply make a profit like it used to. They have to make more profit than the year before and it has to be at a bigger percentage or else the leaders of that corporation or business are deemed to have somehow been unsuccessful in giving leadership.

Corporations, like banks and others, have the onus on them to improve their profits every year, and we have to ask, where are they going to get their profits from? Alas, I guess they can ask the rich and powerful to contribute only so much, and then they turn to their workers in many ways. As we know, some of the ordinary men and women who work in banks are not making huge salaries. They are not even allowed to unionize, it seems, although attempts have been made. So banks get their profits from their workers in terms of not paying them the decent salaries that, given the work they do, I think they deserve, and then they turn to us. For ever greater contributions, through some of the fees they charge, for example, at the ATM machines, they turn to those of us who work for a living every day, who look after our children, pay our mortgages and participate in the local economy.

It is hard to believe that some folks in our society cannot access these services because they just do not have enough money. These folks are then forced to turn to the loansharking industry and, in this instance, the payday loan operators that exist in all of our communities. They have no other choice, so it is important that we regulate these industries.

As I said, we cannot forget for a second that there is a bigger problem and a bigger challenge here and that is how a government charged with leadership can challenge those larger financial institutions that are not living up to their responsibilities or the understanding that all of us have around what it is that they should be providing in the way of financial services.

That would be my message this morning to those who are listening and to those who will be participating in the furtherance of this legislation as it goes to committee, works its way through that process, and comes back to this place so we can get on with protecting families, those who are most at risk and marginalized and regulate this sector of our financial world.

To wrap up, it is good that we are regulating this industry. The industry itself is asking for it. We need to make sure that we make strong and effective regulations. On the other hand, we need to also challenge the banks to do their job effectively. We need to encourage credit unions to expand into other jurisdictions across this country so that people do not have to turn to these lending institutions as a last resort.

Criminal CodeGovernment Orders

10:25 a.m.

NDP

Peggy Nash NDP Parkdale—High Park, ON

Mr. Speaker, in regard to the hon. member's remarks on the payday loans bill, this is an issue that we deal with in my riding of Parkdale--High Park, where increasingly the banks have pulled out of neighbourhoods and very quickly the payday loan operations have moved in to fill the gap.

As poverty has increased on the streets of Toronto, we have seen more people falling between the cracks. They are not able to set up regular bank accounts, so they resort to these payday loan operations.

I agree with having some regulation rather than no regulation. That is what the bill would allow to happen.

Could the hon. member elaborate somewhat on what the banks should be doing? When I met with one bank, representatives said that they had a cut-off level of so many transactions at a given branch and if that does not happen then they are out of the community. Does the member think there should be regulation and public debate about that level or some minimal requirement for some regular bank presence in all of our communities regardless of income level?

Criminal CodeGovernment Orders

10:30 a.m.

NDP

Tony Martin NDP Sault Ste. Marie, ON

Mr. Speaker, I absolutely do. We need to remind the banks of why they were set up in the first place and remind them that they used to provide that service. A bank in one's neighbourhood was a given in the past, and in fact they are pulling out now. I think we need to challenge them to move back in again. They were and could be very profitable with more services to the people of this country.

In my own community of Sault Ste. Marie, for example, a bank in the west end decided that it was going to get rid of the tellers and just have ATMs. That neighbourhood, that whole part of my community, rose up. Many hard-working families, some of them first generation immigrants to this country who had a personal relationship with their teller, said to the bank, “This is unacceptable and we are going to go someplace else”. Lo and behold, within a matter of a month or two, the tellers were back.

As a community, we can challenge the big banking institutions in that way. Of course we can also regulate the fees they charge as they find ever new and creative ways to impose them, and we can get them to stop charging those fees, because they do not need to. They are making enough money without them. They do not need to be charging men, women and families that kind of exorbitant fee to access their own money.

Criminal CodeGovernment Orders

10:30 a.m.

Liberal

Lloyd St. Amand Liberal Brant, ON

Mr. Speaker, I listened with interest to the member's speech. I heard him allude to the high profits realized by banks. I heard him refer specifically to, in his view, the diminished level of service or quality of service that is provided to customers of banks and to the closing of certain branches of banks.

I heard all of that, but at the same time, he rather seems, as I understand his comments, to be in favour of allowing other institutions, payday loan institutions, to be allowed to continue to charge rates of interest which are, in my view, far in excess of what a bank would charge and to impose on the consumer additional charges and fees, with the result that the consumer ends up paying an exorbitantly high amount for the loan received.

How does the hon. member opposite reconcile those two views?

Criminal CodeGovernment Orders

10:30 a.m.

NDP

Tony Martin NDP Sault Ste. Marie, ON

Mr. Speaker, I think the member should have been listening a little more closely. I did not suggest for a second that I support usurious fees by payday loan operators. What I am saying is that in many instances that is the only vehicle left for people. They are turning to those places because they cannot get money anywhere else. The big financial institutions, the big banks, will not even allow the very poor and marginalized to open a bank account.

Therefore, at the very least, we have a responsibility to make sure these operators are regulated so that they do not charge the fees that they do and are not gouging and abusing people. That is what I was saying. I do not think we are ever going to get rid of them. I think they are going to be around. If people need to access money, they are going to access it. If they do not get it at the payday loan operations, they are going to get it from Joe or Jack down the road who is going to lend it to them out of the back door. Then they will pay usurious fees. The consequence of that may be way more dramatic and problematic for some of those at risk, who are our neighbours and friends.

Perhaps we should be looking at putting these operations out of existence and challenging the banks to actually provide the service they were set up to provide in the first place, but what I am saying is that if these payday loan operations are going to exist, and it looks like they will for a while, let us at the very least make sure they are regulated.

Criminal CodeGovernment Orders

10:35 a.m.

Bloc

Nicole Demers Bloc Laval, QC

Mr. Speaker, I am pleased to rise today in this House to debate Bill C-26.

I will be sharing my time with the member for Richmond—Arthabaska, my worthy and eminent colleague, who always comes to the defence of the farmers. He does so in this House and outside it as well, in the ridings and throughout the regions.

I rise in this House to debate Bill C-26 because we in the Bloc Québécois support neither the bill nor the principle of it. I know of no industry that would ask government to legislate a restriction on its profits. My colleague alleged that the industry needed regulation. Regulation of the consumer industry is a provincial and territorial and local business matter. It does not come under federal government jurisdiction.

The aim of the bill, as I read and understand it and as I examine it like my Bloc colleagues, is to amend the Criminal Code, which already contains provisions to restrict the charging of usurious interest rates. Businesses operating in this type of industry want rates higher than those currently in effect under the Criminal Code.

I am not here to protect people represented by other MPs or the people of Canada. MPs will decide what legislation is needed to support their fellow citizens and protect them as required. We must not forget that 547,000 Canadians work for minimum wage and it is primarily they who need payday loans and make use of this industry.

The industry is well entrenched throughout Canada, except in Quebec. Why? Because in Quebec the government has passed legislation in this regard. Rates of interest have been set below the usurious rates charged elsewhere in Canada, well below the figure of 60%. We must keep this in mind.

Quebec passed this legislation because it is entitled to do so under its authority to legislate to protect its citizens, so that all consumers are well protected against an industry that is abusing its power and making money at the expense of the poor.

That is how I see it. It is an industry that makes money at the expense of the poor and, at present, it is primarily the industry that is pressuring the government to reconsider this legislation. That is wrong. Members have to realize that we must not give in to lobbying by the industry and that we must respect those who elected us to this House. We must provide the best framework for our citizens. Once again, this the is a provincial responsibility.

Furthermore, if we accept this bill as it is now written, we will be opening the door to a great danger. The bill states that the federal government would have the right of oversight and veto regarding provincial and territorial legislation. Imagine that the Prime Minister in this House decides to examine Quebec's legislation. We decided that an interest rate of 60% was too high and the Prime Minister could say that he does not agree. Would all Quebeckers have to pay what the rest of Canadians have decided to pay? That is not right. We have established rules to protect our citizens. That is precisely why it is important that we not adopt this bill. It meddles directly in areas of provincial and territorial jurisdiction.

Since the government was elected, the Prime Minister has been making very public speeches claiming he wants to limit encroachment on provincial and territorial jurisdiction. Yet this bill does just the opposite, giving the federal government even more powers than before. Does that make sense? I am asking you, Mr. Speaker. I realize you cannot answer me, but I know that you have been thinking about this and coming to the conclusion that what the government is doing does not make sense.

I hope my colleagues will also give this some thought and come to the same conclusion that when we legislate, when we decide to bring in a new law, that law has to represent as many people as possible, the interests of as many citizens as possible, the interests of citizens who do not have a voice.

That is why we are here. We are not here to represent industry, though we often do so when it is in our best interest. We defend industry when our citizens have jobs they want to keep and when they have the right to work.

Our first duty is to the citizens who elected us as members of Parliament. We must remember that as we discuss this bill in the House. We have discussed it over the past few days. I hope my colleagues will remember that.

I hope they will remember that the people who use this kind of service are society's poorest—the ones earning minimum wage. If we give people the opportunity to borrow money from these places, they will sink deeper and deeper into a cycle of debt from which they will have a very hard time escaping. We must remember that.

Payday lending is short term lending involving unsecured loans for small sums of money—a few hundred dollars for a couple of weeks.

Lenders require that the borrower provide a cheque so that they can get their money as soon as the borrower is paid. Earlier, the claim was made that people earning minimum wage do not have access to banks. But if they are able to write a cheque to pay a loan, then they must have a bank account. We therefore need to work with the banks to make sure these people have access to loans at much lower, much more reasonable rates. Interest rates on personal loans, consumer loans, currently range from 6% to 7%, nowhere near the usurious rates payday lenders charge.

Even the Consumers' Association of Canada is very concerned. Yet the background information on this bill says that it is at the request of the Consumers' Association of Canada and the people who use this type of company that the government is introducing legislation to amend the Criminal Code on criminal interest rates. This legislation has served Canada well to date, but Quebec has more restrictive legislation.

All consumers will lose because of this legislation. The Consumers' Association of Canada understood this. And if the Consumers' Association of Canada understood this, why are we having so much trouble understanding it? If an association that represents so many people properly, effectively and professionally understood it, why are the members who are here to represent their constituents' interests having so much trouble understanding it? The association even believes that the industry is calling for this amendment for its own benefit.

Consumer protection is within the jurisdiction of the Government of Quebec and the provinces. That is why I would ask all my colleagues in this House to think carefully before giving in to pressure from payday loan companies. I would ask them to think about all their constituents who could become trapped in this cycle of debt. We must be very careful. This bill is not what it purports to be. This bill will not help the public. It will help the payday loan companies.

Criminal CodeGovernment Orders

10:45 a.m.

NDP

Tony Martin NDP Sault Ste. Marie, ON

Mr. Speaker, I am having trouble understanding the member's argument that somehow this is an incursion into provincial jurisdiction. In fact what we are doing is turning over to the provinces the responsibility to regulate and control this industry. Those at risk, marginalized citizens, cannot access charter banks in many instances and they are forced to get money to deal with their financial needs from other places. There needs at least to be some regulation so that the huge interest rates that are being charged can no longer be charged.

Criminal CodeGovernment Orders

10:45 a.m.

Bloc

Nicole Demers Bloc Laval, QC

Mr. Speaker, we must not have read the same bill. I do not understand. The objective of the bill is clear. It is not to help the provinces legislate; it is to help the government tell the provinces what to do.

Criminal CodeGovernment Orders

10:45 a.m.

Bloc

André Bellavance Bloc Richmond—Arthabaska, QC

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.