Mr. Speaker, I am happy to rise this evening and speak to Bill C-28, An Act to amend the Financial Consumer Agency of Canada Act.
I do support this bill, although with some reservations, which I will speak to. My main concerns are the lack of an advisory council and the lack of inclusiveness. I do think this bill could have been more inclusive. I hope that when the government reviews this piece of legislation, it makes that a primary concern.
In listening to the debate this afternoon, I have wondered about the percentage of our economic trouble that is caused by low financial literacy. If we recount the state we are in at the moment, we have quite low economic growth. Our growth rate has just been reported and downgraded to 1.6%. We have been through a major recession. If we look across the water to Europe, the United Kingdom has been through a double-dip recession. There is all kinds of trouble in Greece and other countries. The United States has been struggling, although there are some signs of a little bit of a pickup there.
What is the cause of the problem? We know that what happened in 2008 was mainly the result of economic turmoil in the United States, where consumers became too indebted and bought into some bad mortgages. The financial institutions in the United States had invented financial tools that enabled mortgages to be bundled and packaged, and sold from institution to institution. Most institutions had no idea what they were buying but just thought it was a great deal. Earnings went up and up with apparently little or no risk. The economy, under the Bush regime, just continued on until we had a crash.
The investors who bought all of these bundled mortgages realized that the mortgages were flawed and faulty, and there was a crash. Fannie Mae and Freddie Mac and other institutions went under. If we think about that collapse, it not only happened in the United States but went right around the world as well. There was a big increase in unemployment. I read an interesting book written by Gordon Brown on this topic, talking about how global leaders acted very quickly to try to stem a depression, which I think was a real possibility. We are still feeling the effects today.
When I think about this I wonder how much of it was caused by a lack of financial literacy. I would say that very little was. It was really about the large financial institutions that were playing fast and loose with the rules, fooling each other as much as they could to make large profits.
While I see the inherent value of these changes, I do think there is a much larger picture to be taken into account here. I would also say that these things are very unpredictable. In 2008, we had the Minister of Finance on the other side of the House saying that there were no problems with the economy, and all of a sudden we lapsed into a recession.
I would suggest that it is actually the government that needs to sharpen its pencil and take more account of these things, for example, by listening more closely to the Parliamentary Budgetary Officer.
I am disappointed that there was no effort to include an advisory committee in this act. I hope that the government reviews this, perhaps a year into the implementation of the act. The advisory committee would not only bring more eyes to look at this but would also be more inclusive.
I will conclude by talking about the value of inclusion. For example, if labour unions were brought more onboard in this bill, they could go to their memberships and spread the word not only about this new institution but also help increase financial literacy among their members. I really would advise the government to take that into account.