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House of Commons Hansard #187 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was indian.

Topics

Financial Literacy Leader ActGovernment Orders

5:05 p.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

Mr. Speaker, first we must define the problem.

Let us define the issue here. This may seem like an anodyne bill, but in fact at its core it has a very essential contribution to make. It is really a question of fundamental literacy. We can talk about literacy in general terms with regard to reading a book or a document, but literacy goes fundamentally deeper than that. Literacy eventually is also an issue of justice.

I found a particular quote from Globe and Mail finance columnist, Rob Carrick, which is quite revealing about this particular bill. He says, “it's disappointing to see banks, advice firms, investment dealers and mutual fund companies treated solely like part of the solution to the lack of financial literacy in Canada, and not part of the problem as well—

Financial Literacy Leader ActGovernment Orders

5:10 p.m.

Conservative

The Acting Speaker Conservative Bruce Stanton

Order, please.

The hon. member for Pontiac has the floor. If hon. members wish to engage in other conversations I certainly invite them to perhaps share some time in their respective lobbies.

The hon. member for Pontiac.

Financial Literacy Leader ActGovernment Orders

5:10 p.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

Mr. Speaker, I will repeat the quote that I was attempting to read by the finance columnist from The Globe and Mail, Rob Carrick. He wrote something that I think is quite revealing. He said:

...it's disappointing to see banks, advice firms, investment dealers and mutual fund companies treated solely like part of the solution to the lack of financial literacy in Canada, and not part of the problem as well.

We need to recognize that financial institutions and banks in this country have an extremely powerful role to play with regard to persuasion over Canadians. It is that persuasion that could be used rightly or wrongly to affect the financial lives of Canadians.

As well, members should keep in mind the glaring statistic that 26% of Canadians struggle with even the most basic numeracy and 56% do not have high enough levels of numeracy to demonstrate the skills and knowledge associated with the ability to function well in Canadian society. Keeping that fact in mind, we should all be worried. We should also be worried about the high level of domestic debt. This problem needs to be addressed.

HRSDC reveals that the relevant statistics for financial literacy are 20% and 48%. If we compare that with the United States, Canada has one of the highest levels of annual costs for equity funds, which is 2.31% compared to 0.94% in the U.S. It is no wonder banks want more customers.

The highest earning 11% of Canadians contribute more to RRSPs than the bottom 89% of tax filers combined. Canadian taxpayers subsidized those RRSPs to the tune of $7.3 billion in annual net tax expenditures.

To continue with some interesting statistics, 30% of Canadian families lack any retirement savings outside of the Canadian pension plan. Also, as I mentioned before, Canadian household debt is at 150% of income and 25% of Canadians increased their debt load over the past year. In the last quarter, the CPP outperformed the markets by a margin of 10 to 1.

Why am I referring to all of these statistics? It is because what we are discussing with the bill is the relationship of power between the average Canadian citizen's knowledge of the financial system and that of the banks in this country. If we do not empower Canadian citizens with the ability to understand the financial system and what financial institutions impose on them, then we are on a slippery slope.

The measure proposed by Bill C-28 is a good one. However, from our perspective, it is not enough.

For example, we are concerned that there is no explicit requirement that the incumbent of this position be bilingual. And yet, we live in a country with two official languages.

We believe that the person responsible for improving financial literacy throughout Canada must be able to communicate in both French and English. The minister of state has assured us that the incumbent will be bilingual, but the Conservatives are refusing to put this in the legislation. That worries us.

The conclusions of the task force on financial literacy clearly state that the financial literacy leader must be kept apprised of the situation by an advisory council consisting of representatives of the industry, unions, educators, government and voluntary organizations from across Canada. This provision is included in this bill and will prevent the participation of a number of partners following implementation of financial literacy. The Financial Consumer Agency of Canada and the government have said that an advisory council will be established, but that this does not require legislation. This is confusing.

At committee stage, we proposed some amendments in order to address some of the shortcomings. We proposed that the requirement of bilingualism be added—we did ask for that—that a definition of financial literacy be added and that more responsibility be given to the incumbent of the position to be created.

However, the Conservatives rejected our amendments. Stakeholders told us that creating this position is better than the status quo. The government has at least agreed to create this position. In light of the fact that the expenses related to this position were approved in the 2012 budget, we support the bill. We will nevertheless continue to push the government to go further. Even though it has taken a small step in the right direction, there is still a long way to go.

How could we improve the situation? Financial literacy is an important aspect of consumer protection. The fact that many Canadians do not have savings and the rise in consumer debt are symptoms of the discrepancy between the rise in the cost of living and salaries, not financial illiteracy.

Too many Canadians are living paycheque to paycheque. This situation proves that the government is not taking a leadership role and that it is incapable of addressing issues that are truly important to Canadians. The government has never implemented strict laws and regulations to protect consumers. This bill falls far short of providing any real help to consumers.

We believe that the best way to support consumers is to establish a single-window consumer protection department or agency that would handle all consumer issues. If the government really wants to protect consumers, then it should move forward with credit card regulations, for instance, and implement important regulations that would cap interest rates and eliminate the excessive fees paid by consumers.

We in the NDP have a better plan in mind for financial security for retirement. We need to strengthen the Canada and Quebec guaranteed pension plans by gradually doubling benefits in an affordable manner to a maximum of $1,920 a month, thereby providing Canadians with an adequate level of guaranteed income during their retirement.

However, the government and politicians basically need to ensure that Canadians are educated and have access to financial training, as well as ensure that Canadians are protected, particularly from the banks, credit card companies and other financial institutions such as insurance companies, and the power they can hold over Canadians' lives. To that end, those institutions need to be properly controlled through legislation that focuses on the common good.

Financial Literacy Leader ActGovernment Orders

5:15 p.m.

NDP

Jonathan Tremblay NDP Montmorency—Charlevoix—Haute-Côte-Nord, QC

Mr. Speaker, my colleague made an excellent speech on what specific impact this will have on the public.

However, something has been bothering me since I have been listening to my colleagues debate this bill. There is unfortunately no mention of bilingualism in the hiring criteria for the financial literacy leader.

I have to wonder: do French and English use the same terms to talk about financial literacy?

Financial Literacy Leader ActGovernment Orders

5:15 p.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

Mr. Speaker, we can all agree that this is a rather complex field of study. It is clear that the vocabulary is not the same in the two languages. I am bilingual and have lived in Ottawa my whole life—or at least much of my life—and I find it rather difficult to compare the French and English terminology when it comes to financial matters.

Financial Literacy Leader ActGovernment Orders

5:20 p.m.

NDP

Djaouida Sellah NDP Saint-Bruno—Saint-Hubert, QC

Mr. Speaker, I listened carefully to my brilliant colleague's speech on this bill.

We all know that this bill does not contain a strategy to ease the debt burden on Canadians. This bill only legalizes the position. Of the 30 recommendations made by the task force, the Conservatives acted on only one, which was to legalize the creation of this position.

I would like my colleague to expand on his idea. How does he think this could help Canadian families with their debt load, knowing that some are living paycheque to paycheque?

Financial Literacy Leader ActGovernment Orders

5:20 p.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

Mr. Speaker, my colleague is quite right.

First, it does not contain a definition of financial literacy. We should first define financial literacy. Furthermore, there is no accountability measure, and no initiatives to increase financial literacy.

Furthermore, the recommendation to create an advisory council composed of union representatives, among others, was not retained. In my opinion, the suggestions we made in committee would improve this bill and help protect Canadians.

Financial Literacy Leader ActGovernment Orders

5:20 p.m.

NDP

Libby Davies NDP Vancouver East, BC

Mr. Speaker, one of the concerns about the bill overall is, as the member has pointed out, that it is very far removed from consumer protection.

One of the things I have always been concerned about over the years because of the riding I represent is protection, particularly for low income people who, in the first place, have difficulty accessing regular services at financial institutions. The protection they have is very minimal.

I just wonder if the member could comment on whether he has had any similar experiences in his own riding where people who are on fixed or very low incomes have a very difficult time with financial institutions and they absolutely need protection.

Financial Literacy Leader ActGovernment Orders

5:20 p.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

Absolutely, Mr. Speaker, that has definitely been the experience in my riding.

Most statisticians would say that there is a relationship between the level of education, poverty and literacy, so we are talking about compounding situations. If our literacy AND education is low, it is perhaps more difficult to understand the financial system.

My hon. colleague is completely right that statistics are worrying. We are talking about 30% of families that lack any retirement savings. The average Canadian household debt is 150% of income and Canadians' debt load has increased by 25%. We know that a lot of those Canadians are either working poor or poor. It is truly unfortunate. We would hope that we would have a more compassionate government that would address this issue.

Financial Literacy Leader ActGovernment Orders

5:20 p.m.

NDP

Jack Harris NDP St. John's East, NL

Mr. Speaker, I would advise the Chair that I will be splitting my time on this bill, which is a bill to establish a financial literacy leader so-called, which is one of 30 recommendations of a task force on financial literacy. It is rather unfortunate that only 1 of the 30 recommendations were followed because this is really just a very minor or modest first step in what is required.

The problem of course is that many financial literacy programs often devolve into simply admonitions for individuals to save more money, which is an impossible situation for many people. In fact, most people going into retirement, for example, 30% have nothing more than CPP for their retirement plans. We have the Minister of Human Resources and Skills Development suggesting that people should save more for an extra two years for retirement. It is totally inadequate.

I see I have only a short time to give this speech and I would encourage my colleagues to ask some questions and make some comments to allow me to speak a little more.

Financial Literacy Leader ActGovernment Orders

5:25 p.m.

NDP

Marjolaine Boutin-Sweet NDP Hochelaga, QC

Mr. Speaker, with respect to literacy in general, we know that 43% of the population has level 3 or lower reading skills. This portion of the population already has difficulty reading. Financial literacy could perhaps help somewhat, but if people cannot read, there may be measures, other than financial literacy initiatives, that would better help people to help themselves financially.

Financial Literacy Leader ActGovernment Orders

5:25 p.m.

NDP

Jack Harris NDP St. John's East, NL

Mr. Speaker, my colleague points to a real inconsistency by the Conservative government in suggesting that financial literacy is so important that we should undertake this task. It is preaching financial literacy now, but back in 2006 it cut nearly $18 million from adult literacy programs across the country. This is a bit of a fig leaf for the Conservatives' inaction, frankly, on the real problems of literacy in this country and its failure to protect consumers and build a better regulatory framework.

Financial Literacy Leader ActGovernment Orders

5:25 p.m.

NDP

Djaouida Sellah NDP Saint-Bruno—Saint-Hubert, QC

Mr. Speaker, as I listened to my colleague's brief speech I realized something: this government does not really understand Canadians' economic situation.

It is well and good to educate people. However, will passing this bill to create this position not result in advertising for banks across Canada? I would like my colleague to talk more at length about this issue.

Financial Literacy Leader ActGovernment Orders

5:25 p.m.

NDP

Jack Harris NDP St. John's East, NL

Mr. Speaker, my colleague asked an important question. As Barrie McKenna, a business columnist with The Globe and Mail, stated:

Looking to financial literacy to fill the void is like asking ordinary Canadians to be their own brain surgeons and airline pilots. The dizzying array of financial products, mixed with chaotic and increasingly irrational financial markets, makes the job of do-it-yourself financial planning almost impossible—no matter how literate you are.

What happens, of course, is that this is just driving people into the institutions that have financial products. In this country, we pay two and three times as much on management fees in the private sector than in the Canada pension plan, which is a better way of saving for Canadians.

We have a problem. It is considered to be a very small first step, but one that requires leadership from the government. We are not sure we are going to get it, but we think this is a start that ought to be made.

Financial Literacy Leader ActGovernment Orders

5:30 p.m.

NDP

The Deputy Speaker NDP Joe Comartin

Resuming debate.

Is the House ready for the question?

Financial Literacy Leader ActGovernment Orders

5:30 p.m.

Some hon. members

Question.

Financial Literacy Leader ActGovernment Orders

5:30 p.m.

NDP

The Deputy Speaker NDP Joe Comartin

The question is on the motion. Is it the pleasure of the House to adopt the motion?

Financial Literacy Leader ActGovernment Orders

5:30 p.m.

Some hon. members

Agreed.

Financial Literacy Leader ActGovernment Orders

5:30 p.m.

NDP

The Deputy Speaker NDP Joe Comartin

Hearing no nays, I therefore declare the motion carried.

(Bill read the third time and passed)

The House resumed from November 21 consideration of the motion that Bill C-398, An Act to amend the Patent Act (drugs for international humanitarian purposes), be read the second time and referred to a committee.

Patent ActPrivate Members' Business

5:30 p.m.

NDP

The Deputy Speaker NDP Joe Comartin

It being 5:30 p.m., the House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-398 under private members' business.

Call in the members.

(The House divided on the motion, which was negatived on the following division:)

Vote #515

Patent ActPrivate Members' Business

6:10 p.m.

Conservative

The Speaker Conservative Andrew Scheer

I declare the motion defeated.

The House resumed from November 22 consideration of Bill C-383, An Act to amend the International Boundary Waters Treaty Act and the International River Improvements Act, as reported (with amendments) from the committee.

Transboundary Waters Protection ActPrivate Members' Business

6:10 p.m.

NDP

The Deputy Speaker NDP Joe Comartin

The House will now proceed to the taking of the deferred recorded division on the motion to concur in Bill C-383 at report stage under private members' business.