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House of Commons Hansard #87 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was agreements.

Topics

Financial Literacy Leader ActGovernment Orders

3:40 p.m.

NDP

Tarik Brahmi NDP Saint-Jean, QC

Mr. Speaker, my hon. colleague from Sudbury made a comprehensive speech. One detail which he pointed out was that financial literacy should not be a substitute but a complement to actions and real measures from the government. Could he comment on that?

Financial Literacy Leader ActGovernment Orders

3:40 p.m.

NDP

Glenn Thibeault NDP Sudbury, ON

Mr. Speaker, it is so true. Financial literacy cannot be the one crutch we lean on to say that we have made sure everyone is educated so now we can wash our hands of what we need to do.

We need a strong economic plan. We are not seeing that. We need to ensure that consumer protection is a priority. We have seen that whittled down by Liberal and Conservative governments time and time again. We need to ensure we are standing up and protecting Canadians. This bill does not do it. We have a plan that will.

Financial Literacy Leader ActGovernment Orders

3:40 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

Mr. Speaker, we all agree that financial literacy is important, that it is a good thing, but that is not the subject of today’s debate. The issue is whether or not this bill is going to strengthen financial literacy. And on that point I must say that I have many doubts about this bill.

As I said, we are supportive of financial literacy. Who would not be? We are deeply concerned about the lack of information in the bill. it is my hope that the government will clarify further detail in the course of this debate.

We can all agree that increasing the financial literacy of Canadians is an important goal for government, both federal and provincial. A more financially literate population would be a more prosperous population. But financial literacy is not the panacea that the Conservative Party seems to pretend it to be.

Far too often over the past six years we have been told by the government that problems like increasing post-secondary education costs and rising household debt can simply be solved by waving this magic wand of financial literacy. This is simply incorrect. There are a number of policy levers the government can operate to help solve the issues of rising household debt or runaway student debt. Increased financial literacy is one of them. My goal is not to downplay the importance of financial literacy but only to point out that it is not the only policy solution available to the government.

Let me turn now to the contents of the bill. I get the distinct impression that Bill C-28 was written on the back of an envelope, that the primary motive was probably to have an “announceable” for Financial Literacy Month last November, because it is virtually content-free. I will explain.

The bill and its supporting documents are completely devoid of any detail as to how the office of the financial literacy leader would even work. The bill does not specify if there would even be an office of the financial literacy leader or if he or she would simply be one more employee at FCAC.

Bill C-28 was a response to the recommendations of the Task Force on Financial Literacy. The task force was created as part of the 2009 budget. It reported back to the minister early last year. The task force had 30 recommendations. This legislation satisfies only a part of one of the recommendations.

The first recommendation was that the government create the position of financial literacy leader and that this person be charged with improving financial literacy across Canada. It also said the financial literacy leader should report directly to the Minister of Finance. Under this legislation this position would report to the commissioner of FCAC. Let us give the government half a point for getting recommendation 1 half right. Its total score then is one-half of one point out of thirty. If I were back in my professor days, I do not think that would be a passing grade.

The bill would also give FCAC the power to impose a levy on the banks in order to pay for its efforts in improving financial literacy. But it would also give the Minister of Finance the power to spend government money to achieve the same objective. As parliamentarians, we are yet again being asked to vote on a bill that causes the government to incur costs, spend money and perhaps tax banks without being given even a hint of the numbers involved.

Liberals, indeed all parliamentarians, should not have a problem with spending resources to improve financial literacy. However, we do want to know the order of magnitude these expenditures and the related taxes would be on. Are we talking about $100,000, $500,000, $1 million, $10 million? We have no idea, because there is nothing in the bill to tell us what this process would involve other than the naming of this one person. The question of how much things would cost is important because many of the other recommendations from the task force's report would require additional effort and financial commitment on the part of the government.

For example, recommendation 2 requires the government to establish an advisory board on financial literacy. The advisory board would help the financial literacy leader to develop a national strategy on financial literacy.

Recommendation 4 requires the national strategy to incorporate financial literacy in the school curriculums across Canada and at all levels of education. This would obviously require coordination with provincial governments and may I suggest the direct ministerial mandate asked for in the task force's first recommendation.

Recommendation 9 suggests that financial literacy material be delivered to Canadians through programs that reach Canadians directly, such as EI, CPP, OAS or the universal child care benefit. There are many such requirements and they will all cost money.

Surely the government must have some idea of the anticipated costs. Yet there is no mention of any of these recommendations or any actions to be taken or not to be taken in the bill. Therefore, we are all left totally in the dark as to what, if anything significant, this leader would accomplish, how much money it would cost and what the scope of the mandate would be.

This is not the first time that the House of Commons has been asked to vote on legislation without knowing the cost. The most prominent case that comes to mind is Bill C-10, the tough on crime compendium of bills. The government did not tell us what the additional costs would be for new prisons. We know from the Parliamentary Budget Officer that it is many billions of dollars. We know that some of those billions would be downloaded onto the provinces. The government did not come clean on that and it was a far more important case in terms of expenditure of funds than this would be. However, it is the same principle. The government wants us to pass legislation, but tell us nothing about what it would actually do and what it would actually cost.

This similar issue has caught the attention of the government operations committee, which is currently conducting a study on how Parliament considers supply and more broadly how we as parliamentarians are presented with information on the government spending plan. I would certainly suggest that not knowing the cost of bills before we vote on them is just one part of this problem.

Back to the contents of the bill, there are other existing mechanisms at the disposal of the federal government to promote financial literacy. For example, the Canadian Foundation for Economic Education was created in 1974 as a non-profit, non-partisan organization with the goal of promoting greater financial literacy. It already has tremendous buy-in from government and from the private sector. A quick scan of its website indicates that its list of board of directors include prominent members of the private, post-secondary and labour sectors. On the government side, the CFEE has relationships with the federal Department of Finance and numerous ministries of education provincially.

I know this group from my earlier incarnation with the Royal Bank as their chief economist and I had several meetings with this group. I know that they were working diligently. However, it certainly is not obvious from the bill, which tells us virtually nothing, why the addition of one more body in the bowels of the federal bureaucracy would improve financial literacy better than the work being carried out by the Canadian Foundation for Economic Education.

In the end, the issue I have with the bill is that we simply do not know what the government is planning to do. We do know that it may involve taxing banks. We know that it may involve spending more government funds, but we have no idea how much. We do not know the size of this new organization. We do not know which of the other recommendations from the Task Force on Financial Literacy would be carried out. We know very little, virtually nothing about it.

As I said at the outset, improving financial literacy is an important task for the federal government. However, we have concerns on this side of the House that the newly created financial literacy leader would not be able to carry out his important task.

There is another side of this coin. We can talk about the need for greater financial literacy on the part of Canadians, but we can also talk about the problem of financial illiteracy on the part of the Conservative government.

I would like to say a few words on the financial illiteracy of the Conservative government. I think if there needs to be a course in financial literacy, the first ones to enrol in such a course should probably be the members sitting opposite.

My first example of Conservative financial illiteracy goes way back to 2006. Prior to the arrival of the current government in 2006, for many years Canadians had to have at least a 5% down payment on a mortgage. The longest mortgage they could get was 25 years. What did these financial wizards do in 2006? Instead of a 25 year maximum period, they made it 40 years.

Instead of a 5% minimum down payment, they made it zero. Brilliant. Magic. People could get a zero down payment mortgage for 40 years under the Conservative government.

Now, the problem is that this is like the subprime mortgages in the U.S. Eventually, they found out, but did not admit it because the Conservatives would never admit they made a mistake. They discovered they had made a mistake, so they put it back from 40 years down to 35 years, and they brought the minimum payment up from zero to 5%. Then they claimed credit for tightening the system.

However, the system is not back to where it was when the Conservatives arrived. It is still looser. That is the first example of financial illiteracy.

So I suggest that the Minister of Finance and some of his colleagues enrol in financial literacy 101. If they do, maybe their performance will improve.

The second example of financial illiteracy is the fact that the Conservatives were so lucky when they inherited a massive $13 billion Liberal surplus when they came to power. Then they proceeded to spend like drunken sailors. They are the biggest spenders in Canadian history, to the point where these Conservatives actually ate through all that surplus and went into deficit before the recession began.

That is a second reason for the Minister of Finance to enrol in that course which I shall call financial literacy 101. It is important to have a prudent fiscal policy. It is not good financial literacy to blow through a $13 billion surplus by spending madly when the economy is strong. One might have a deficit when the economy is weak, but one should not run through a surplus when times are good, with massive spending just before a recession begins.

I have a third example of this government’s lack of financial literacy. That is its plan for massive cuts in government spending at a time when the Canadian economy is very fragile. It is suggesting reductions on the order of $4 billion or even $8 billion in public spending and reductions of government services to Canadians. It will be doing this at a time when the economy is very weak.

Let us not forget that unemployment remains high; let us not forget that there is a crisis in Europe; let us not forget that the U.S. economy is extremely weak.

We are living in a world where the unemployment rate remains too high and where the level of risk is very high everywhere, compared with the past.

In this context of a hugely fragile weak economy, anyone who went through financial literacy 101 would know that this is not the moment to have massive cuts in government spending, massive layoffs of public servants and massive reductions in the services provided to Canadians. It is not a good idea.

Members do not have to believe me, I will invoke the name of Christine Lagarde, managing director of the IMF. The IMF is the mother of all fiscally prudent people. Typically the IMF calls for countries to cut. Christine Lagarde recently said that countries which have room, and this might not include Greece but it certainly includes Canada, should in the short run focus on measures to create jobs and support the economy, and in the medium term they should have a credible plan to balance the books and bring down debt. That is not me talking, that is the head of the IMF. The chief economist of BMO had said something similar, that making massive cuts at this time is as crazy as what Herbert Hoover did in the U.S. during the Great Depression.

As I said earlier, I think members of the government, maybe even the Prime Minister, might like to enrol in this course which we could set up called financial literacy 101.

If they do this, there will be at least three subjects. The first is that it is not smart to have mortgages amortized over 40 years with no capital outlay. That makes no sense. We saw this in the United States, but this government changed the system for the worse in 2006. Second, when you inherit a $13 billion surplus, it is not financially prudent to spend all of those funds when the economy is strong and to go into deficit even before the recession. That is not a good example of financial literacy.

That is what this Conservative government did: it did not demonstrate sound financial literacy. As I just said, it is not a good idea to make massive budget cuts in government investments and have monumental job losses in the public sector when the economy is weak and the global economic system is very fragile. That too is not a good idea.

In conclusion, in terms of the mark that the bill deserves, it got 1 of the recommendations out of 30 half right, so is one-half of one out of 30, which is a failure. Also, in terms of the three subjects for a financial literacy class 101, which I recommended for the government, it fails on all three.

Financial Literacy Leader ActGovernment Orders

4 p.m.

Conservative

Laurie Hawn Conservative Edmonton Centre, AB

Mr. Speaker, I always listen with attention and sometimes amusement to my friend across the way who has a self-exalted position of being the financial guru of the western world.

It is easy to run a surplus when one has unlimited powers of confiscation and taxation. In bragging about the $13 billion surplus, I would remind the hon. member that it was courtesy of the $60 billion confiscated from pension funds for the public service, RCMP and the Canadian Forces, and another $50 billion confiscated from the EI fund. It does not take a financial genius to run a surplus with that kind of power.

Has the hon. member understood or listened to any of the people around the world whose main comment, when talking about Canada and the strength of the Canadian economy and its unemployment and employment situation, is they wish they were in fact in Canada?

I know we can never come up to the hon. member's self-exalted standards, but will he admit that financial literacy is important and that any step in that direction is valuable, whether it comes up to his marvellous standards or not?

Financial Literacy Leader ActGovernment Orders

4 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

Mr. Speaker, I consider myself a relatively modest person. I am not claiming exalted status.

In response to his question, may I remind the member that the two main reasons for Canada's relatively strong position are both thanks to the Liberal governments of Paul Martin and Jean Chrétien. When we came into power in 1993, we inherited a $42 billion Conservative deficit. In relative terms, that was much bigger in those days than it would be today. We got rid of that deficit pretty fast. We paid down debt. That is why, instead of inheriting a $42 billion deficit from us, as we did, the Conservatives inherited a $13 billion surplus and then blew it.

Also, we saved the banks because we refused to deregulate. Those guys over there wanted to go all the way to bank deregulation. That would have been a disaster.

Financial Literacy Leader ActGovernment Orders

4 p.m.

NDP

Mike Sullivan NDP York South—Weston, ON

Mr. Speaker, I, too, note that the one-half recommendation of the financial literacy report in the bill is the appointment of yet another civil servant to oversee something. We are not exactly sure what, except to collaborate and coordinate activities with unknown stakeholders. Many other recommendations having to do with financial literacy have apparently been completely ignored by the government, such as training people, actually including it in school programs and including it as a skill that is required of the federal government.

What does the member say to all of the things that are missing from the legislation that makes it very difficult for anyone to support it, if this is all we are going to get?

Financial Literacy Leader ActGovernment Orders

4:05 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

Mr. Speaker, I certainly agree with the spirit of what my colleague is saying. The only way I can explain a bill that contains virtually nothing is that the Conservatives did it at the last minute. Maybe they thought that since next month would be financial literacy month, they had better have an announcement, so they decided to make a bill. It has a bill that says one person who will report not to the minister, as the commission suggested, but to someone else. They have nothing on the 29 recommendations, many of which make a whole lot of sense.

We are left knowing essentially nothing about whether the person in this job would actually carry out those recommendations or not, or whether as I said earlier, $1 million, or $100 million or $100,000 would be spent. We know virtually nothing and I can only conclude that the bill must have been written on the back of an envelope to prepare for an announcement in financial literacy week.

Financial Literacy Leader ActGovernment Orders

4:05 p.m.

Liberal

Wayne Easter Liberal Malpeque, PE

Mr. Speaker, I enjoyed my colleague's remarks and the facts that he laid out and how he indicated that maybe the finance minister should take financial literacy 101. He is the biggest spending finance minister with the biggest deficit in Canadian history with more wasted money during the last couple of years, everything from gazebos to whatever, with no open tendering in terms of the F-35s and the list goes on and on. I agree with the member's comment.

Is this just another bill of smoke and mirrors, which we see so often from the government, where it tries to allege it is really doing something, when in effect it is doing nothing? One thing that is clear in the bill is the appointment of another person. We have several boards with patronage appointments where the appointees are virtually doing nothing but spending money.

Is this really another bill in which the government will try to message that it is doing something when it really is not?

Financial Literacy Leader ActGovernment Orders

4:05 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

Mr. Speaker, I thank my hon. colleague for his very convincing preamble. There is a risk that he is right, that we might just be creating yet another empty office. Remember other cases where new jobs were created but never filled, so taxpayers would be spending millions of dollars on an office that was empty and not doing anything.

There is a risk of this, especially when we are told nothing about the mission, the parameters around this or the number of employees. There is a real risk that the government is trying to create the impression of activity using at least some taxpayer money and potentially creating nothing.

Financial Literacy Leader ActGovernment Orders

4:05 p.m.

Newmarket—Aurora Ontario

Conservative

Lois Brown ConservativeParliamentary Secretary to the Minister of International Cooperation

Mr. Speaker, we could spend the afternoon poking accusations across the floor. There are $40 million still unaccounted for under Liberal budgets. I am sure Canadians would like to know that.

I would like to get back to the essence of what the legislation tries to do. I have two daughters, both successful young ladies. My hope is they will be financially successful and understand the mechanisms available to them to make wise choices with their money, to be educated about those opportunities and to have the opportunity to invest their money to create their own futures.

Because much of what my colleague said earlier rests with the provinces, because of a curriculum for schooling being a provincial responsibility, does he have any suggestions for the government as to how we might work with those partners to ensure that the financial portion of this education could be included in perhaps high schools or in college education? Does he have any suggestions for the government to work on?

Financial Literacy Leader ActGovernment Orders

4:10 p.m.

Liberal

John McCallum Liberal Markham—Unionville, ON

Mr. Speaker, first, in relation to the member's earlier comments about her daughters, of course, we on this side agree that financial literacy is very important not only for her daughters but my children and all Canadians. There is a lack of it and a need for more.

Our question is not that. Our question is whether the bill would make any difference or whether the existing agencies, which I described in my speech, are doing the job. There might be duplication and it might not make the situation any better. Since the bill does not tell us anything about how many people or what the mandate would be, it is unclear to me what the answer should be.

Working with provincial governments to improve financial literacy, including in areas of provincial jurisdiction, through some sort of national committee might be a good idea, but there is no statement by the government in the bill as to whether that is involved or not. Its absence suggests it is not involved.

If the member is asking whether, in principle, a co-operative body involving different levels of government to address financial literacy in different areas involving both levels of government jurisdiction is a good idea, yes. However, if that is the case, why was it not in the bill?

Financial Literacy Leader ActGovernment Orders

4:10 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

Mr. Speaker, I welcome the opportunity to speak on this subject. I especially want to take the time to thank the member for Edmonton—Leduc, the chair of the finance committee, who was very instrumental in the initiation of this bill.

I understand why the member from the Liberal Party does not want this bill to go forward, a seriously co-operative bill resulting from working with the provinces and territories. The Liberal Party's idea of co-operation was to take $25 billion from the provinces back in the 1990s for social care, education and infrastructure.

As we know, when the Conservatives came to power, the Federation of Canadian Municipalities actually identified that there was a $123 billion deficit. The Liberals are the third party and they clearly indicated that the $123 billion deficit on infrastructure in the country was as a result of past practices of federal and provincial governments. For the most part, we all know why provincial governments could not invest in infrastructure. It was because $25 billion were taken by the previous federal Liberal government, of which the member was an active participant.

Before I continue, I would like to move the following motion. I move:

That this question be now put.

Financial Literacy Leader ActGovernment Orders

4:15 p.m.

NDP

Mike Sullivan NDP York South—Weston, ON

Mr. Speaker, having read the bill, I am curious as to how big the envelope was that the Conservative Party wrote this on. It seems to be very hastily and shabbily put together legislation that does not do justice to the report of the financial literacy task force, which made 30 recommendations, not 1, a report that had a great deal of depth and detail to provide a framework for financial literacy in Canada. We believe that framework for financial literacy is not met by this bill. The bill therefore is woefully lacking in detail, its objective, the mandate of the individual and in any of the other 29 recommendations made by the task force.

Where are the remaining 29 recommendations?

Financial Literacy Leader ActGovernment Orders

4:15 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

Mr. Speaker, I am glad to see this particular New Democratic member not criticize the issue as it relates to financial literacy, as the Liberal Party did previously. We all clearly know now that the global economic recession is causing significant problems in the world economy as a whole. That is a result of personal finances primarily and the inability of people to keep track of their personal finances and to be able to manage those properly. That is why this bill is so important.

However, before we start with the entire 30 recommendations, I would say it is just like picking a coach for a hockey team. Before one picks the entire team, one first picks the coach so that the coach can be part of the rest of the team. In this particular case, I would say that is exactly the issue, and I hope that answers the member's question.

If people do not know that, though, I would point out that this particular bill deals with the importance of having tools and knowledge so that Canadians will be able to make responsible financial decisions for their future. Clearly, our belief as a government is that Canada's future is based on Canadians as a whole and their success depends on their own good management decisions, and we are going to help them with those decisions.

Financial Literacy Leader ActGovernment Orders

4:15 p.m.

Liberal

Wayne Easter Liberal Malpeque, PE

Mr. Speaker, I am a little surprised by the motion that the question be now put. Just as we were starting to really get into the meat of the bill and to find out what was wrong with it, the government found another way of invoking closure, shutting down debate so that questions could not be asked on this bill.

I would suggest that this bill is really a shell with no meat in it, other than to perhaps appoint someone else in a patronage appointment and leave the impression that the government is doing something about financial literacy when it is not.

Financial literacy is important; we know that and we agree with it. The problem and the question that we need answers for, which the member is now trying to shut off debate about, is that the bill really does nothing to add to the tool chest of recommendations that a former member talked about and to actually exercise financial literacy and get that job done.

Could the member answer two questions? Why is he in a roundabout way trying to invoke another method of closure and shut down debate? Could he also tell me what else is in this bill from his perspective, because I do not see it, other than making another appointment and spending money without providing the tools to do the job?

Financial Literacy Leader ActGovernment Orders

4:15 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

Mr. Speaker, I always find it amusing when the member for Malpeque stands on his feet because, of course, I am from western Canada and that particular member wants to make it legal to sell marijuana but wants to keep it illegal to sell wheat. I have always found that to be interesting from that member's perspective.

I am not going to take any lessons from that particular member who was part of a government that cut $25 billion in social transfers to the provinces and, certainly, I am not going to take his expertise—

Financial Literacy Leader ActGovernment Orders

4:20 p.m.

Liberal

Wayne Easter Liberal Malpeque, PE

What about the $40 billion health transfer? Do you remember that?

Financial Literacy Leader ActGovernment Orders

4:20 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

Mr. Speaker, I am glad he brought up the amount of $40 million, as I think I heard, because that is still what is missing as a result of the sponsorship scandal of a government he was a member of at the time. I am not going to take lessons from him.

However, we have a government with a Minister of Finance who is the number one finance minister in the world. We have a country that is the best off of any country in the world, and that is under the leadership of this Prime Minister, this Minister of Finance and this cabinet. We do not need to take lessons from someone who left us far behind and left the provinces far behind. We are going to move forward with a government and a cabinet that shows leadership in the world and clearly has a strong economy for Canadians.

Financial Literacy Leader ActGovernment Orders

4:20 p.m.

NDP

Raymond Côté NDP Beauport—Limoilou, QC

Mr. Speaker, we can say a number of things about this bill, things that the hon. member is unfortunately incapable of saying. There is a reason that he insists on cutting off debates.

The bill talks about financial literacy, but the reality is that it contains no definition. The government does not even care about finding out what it is. There is no accountability mechanism for the financial literacy leader, and there are no initiatives to increase financial literacy itself.

I really wonder where we are going with this. Frankly, we are going to provide Canadians with a fake institution, with a puppet that will not even be able to help them. What is that? It is a waste of public money and an abuse of the trust of all Canadians.

I would like to ask the hon. member to reassure me on another matter. With the government in such a rush, does it at least have a financial literacy marketing plan for its puppet in order to improve the government's image? I even worry about that.

Financial Literacy Leader ActGovernment Orders

4:20 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

Mr. Speaker, I could not help but snicker when the member talked about this government wasting money, because nothing could be further from the truth. An NDP member suggesting that a Conservative government would waste money is bizarre indeed.

We know that many of these initiatives are currently under way in Canada and have been for some time. In fact, some things are taking place in high schools across this country with web-based systems.

Clearly, the task force that launched public consultations with Canadians in February 2010, with its over 17 sessions in 15 communities across this country, did receive input from Canadians.

We are not starting off from ground zero. We clearly know what caused the global economic recession. We clearly understand that we have to help Canadians educate themselves on how to move forward with their own personal finances and how to be more successful, so that we can continue to have that leadership position in the world not only as a government that is keeping a strong country and keeping Canadians safe, but also as a country that continues to enjoy an excellent quality of life, second to no one else in the world. Canadians can do that by being educated with our help.

Financial Literacy Leader ActGovernment Orders

4:20 p.m.

NDP

Ève Péclet NDP La Pointe-de-l'Île, QC

Mr. Speaker, what the hon. member is saying is very interesting. But public funds were spent to create this task force, whose membership was widely criticized by Canadians. With this government, that does not surprise me at all. But, most of all, after spending taxpayers' money and taking time, the government is accepting only one of the task force's recommendations. Is that really going to help people who need to learn about this, people likely with low incomes, who pay no taxes and so will not be able to take advantage of the tax credits? They say that the NDP spends taxpayers' money for nothing, but here we have taxpayers' money being spent on a job that has not been done.

Financial Literacy Leader ActGovernment Orders

March 1st, 2012 / 4:25 p.m.

Conservative

Brian Jean Conservative Fort McMurray—Athabasca, AB

Mr. Speaker, I hope we never get to see what an NDP government could do with public funds. It would be pretty embarrassing indeed.

The proposed amendments to the Financial Consumer Agency of Canada Act aim to establish the financial literacy leader within the agency. There is already an agency involved. It is a key step in addressing the task force's recommendations.

However, the difference between our government and a potential NDP government is not just that our government would not waste taxpayers' money on wishes and wants, but also that the NDP or the Liberals would impose what they wanted, what its leadership wanted, on Canadians instead of listening to Canadians as we are doing with this legislation. We are going to appoint a coach, someone who can listen to Canadians, someone who can understand and work with stakeholders and other agencies across Canada, including financial experts.

We are going to listen to them and then bring forward legislation based on stakeholders' best wants and desires in the best interests of Canadians.

Financial Literacy Leader ActGovernment Orders

4:25 p.m.

Conservative

The Acting Speaker Conservative Bruce Stanton

It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Winnipeg North, aboriginal affairs; the hon. member for Montcalm, persons with disabilities; and the hon. member for Brome—Missisquoi, the firearms registry.

Financial Literacy Leader ActGovernment Orders

4:25 p.m.

NDP

Tarik Brahmi NDP Saint-Jean, QC

Mr. Speaker, I would like to start off by responding to the hon. member for Fort McMurray—Athabasca. In light of the events we are currently seeing, he should not be so confident because he might be disappointed in the next election if he ends up in the opposition.

I would like to speak to Bill C-28 as the deputy critic for consumer protection. I would first like to criticize the parliamentary manoeuvre that we have just witnessed, which sought, once again, to reduce the time allotted to the opposition members so that they do not have an opportunity to point out the shortcomings and flaws in the bill. The Conservatives use this method constantly, and it is our duty to denounce it.

This bill has a number of obvious flaws. The first one that jumps out is that the financial literacy leader will not be required to be bilingual. Being bilingual does not just mean knowing a few words in French or being able to read a few documents in French. Being bilingual also means being able to explain provisions, to present choices, to listen and to meet with people across Canada, especially in provinces with francophones, not just Quebeckers.

Hon. members from Quebec and from other francophone regions in Canada and I myself, as the member for Saint-Jean, want first to know where in the bill is the provision that ensures that the financial literacy leader is capable of communicating in both languages correctly, using decent French, and is capable of putting himself at the level of the people he intends to serve.

Above all, I do not want to hear the government say that we should not worry because, once he is appointed, the leader will take French courses, which is what we have been hearing over the past few months in the House. The government claims that it is possible to learn French and that there is no need to worry. No. That is not true. It takes years, it takes skills and a will to learn a foreign language. So that is an obvious flaw in the bill. That goes against the bilingualism requirements of this country and against Canada's will to stay bilingual and able to serve all its people in both official languages.

Now, let us talk a bit about financial literacy programs. Their goals are often criticized. We know that, more often than not, these programs are not intended to give consumers the tools that will enable them to pay fewer fees and have more control over their expenses. Instead, they are used by large financial institutions—banks and insurance companies—to gain more clients who will spend more money.

One of the things that should grab our attention about the famous task force on financial literacy is who is on it. It has 13 members. Don Stewart, the CEO of Sun Life Financial, is the chair of the group, and his vice-chair is Jacques Ménard, the chairman of BMO Nesbitt Burns and the president of BMO Financial Group Quebec. The very make-up of this task force should give us an indication of its objectives. The recommendations clearly show that they are basically designed to help financial institutions boost their clientele, obtain more clients. They do not aim to give consumers the ability to manage their money better and save by using what banks or financial organizations have to offer.

This is an important element. This is the make-up of the famous task force. Beyond that are the recommendations. This task force issued 30 recommendations, from which the government has plucked only one. The only one it took was the first, which involves appointing a financial literacy leader. It is too bad, because the second recommendation was much more worthwhile. It focused on creating a task force, an advisory board, that would give the leader direction and would have control over the actions of this financial literacy leader. So the task force would lend the financial literacy leader greater legitimacy because he would be accountable. This is an important part that this government ignored, intentionally in my opinion, because it is the second recommendation. It is not some subsidiary recommendation tucked away at the end of the document; it is truly the second recommendation.

Another aspect of this legislation is that it attempts to lay a guilt trip on consumers by claiming that they are not competent enough to properly manage their money. But it is absurd to try and educate consumers about how to save money when they do not have any. That is the main problem: consumers, currently, do not have money and, therefore, do not have the ability to save. They can be taught as many strategies as possible, but when the average family is indebted to the tune of over 150% of their income, in other words, the equivalent of half of their income in debt, how can this family of average consumers save money when they do not even have the means to pay off their debts? What is most striking about this legislation is that it does not deal with the problem, but with the consequence, the consequence being that now that consumers are in debt, we are going to explain to them how to avoid going further into debt.

A French comedian once said: “Write to us and tell us what you need, and we will explain to you how to make do without it.” That is this government's logic: do not create ways to help consumers; instead, explain to them, after the fact, how to get out of their predicament.

Another very interesting aspect of this report is that it confuses a complement and a substitute. Indeed, what we call financial literacy, which is also known as “financial education” or “financial knowledge”, must complement any government measures to assist consumers. It must not be a substitute.

A very interesting report was published in 2009 by the OECD and is entitled “Financial Literacy and Consumer Protection: Overlooked Aspects of the Crisis”. This report was prepared by the OECD following the financial crisis in order to demonstrate that the fact that consumers had started to use increasingly complex financial mechanisms that they did not understand jeopardized not only consumers' financial security, but the financial security of the whole system. Moreover, this very interesting report states that some recent financial innovations are incomprehensible not only to consumers, but also to bankers themselves.

One of the things mentioned was floating interest rate loans. When the time comes to choose between a floating rate and a fixed rate loan, most consumers are unable to understand the difference between them and how their choice will affect their future indebtedness. And yet, they are the ones who make the choice.

Subprime mortgage loans were what caused a crisis that had never been seen before, mainly in the United States. Why? Because consumers were given the opportunity to get involved in innovative mechanisms that were different from traditional financing mechanisms. The end result was that their own financial health as consumers was endangered, as well as the financial health of the whole system. As it happens, the whole system collapsed because some little financial geniuses devised instruments that are very difficult to understand.

If most people who work in the field of finance cannot understand them, how can the average consumer avoid being confused? The very interesting OECD report stated that most consumers greatly overestimate their financial skills. Here is a personal example. In a previous life, I was in charge of a team that conducted social population surveys for Statistics Canada. One of the projects was to evaluate the literacy and numeracy of the people being surveyed.

The results of these surveys were disastrous. Not only that, but what does not show clearly in these studies is that most people who are unable to respond will not respond, because they are ashamed. Quite simply, people who are unable to add or subtract will not participate in these studies. This means that the pool of respondents is biased from the very outset. When the sample is biased at the outset because those who are not capable of responding are ashamed of taking part in the study, then the results clearly do not reflect just how disastrously uninformed most consumers are.

This proposal is meaningless not because it would be impossible to do something worthwhile with it, but because the government has decided to blame indebtedness on consumers, households and families who find themselves unable to control their spending because they do not have enough money, rather than take action that would truly enable consumers to first get themselves out of debt and perhaps then set money aside for the future.

Unlike the Conservatives, who think that education and financial literacy are substitutes for programs, the NDP proposed concrete measures in our election platform in May 2011. For instance, we proposed—and it was our leader, the late Jack Layton, who drew attention to this—capping interest rates at 5% above prime, which is based on the Bank of Canada's key interest rate. The NDP proposed this concrete measure, which would give all Canadian families who are struggling with record debt levels—that is what Statistics Canada is reporting—a little breathing room and hope that they will one day get out of debt.

One interesting thing that came out of the 30 recommendations in the task force's report was this: “the Government of Canada...integrate a financial literacy component into the Canada student loans program for students receiving funding.” Helping students, most of whom have a lot of debt, would be very beneficial. This report recommends that the Government of Canada integrate programs, concrete measures to help students manage and deal with their level of debt, which can be huge. That is recommendation number 10 in the report. But where is that recommendation in the bill before us today? It is missing. Why is the government ignoring things that could help change the lives of consumers?

Instead, the Conservatives prefer to create a very well-paid executive position, but they will not even give that individual an advisory board to make recommendations and give the position some legitimacy. Of the 30 recommendations, the Conservatives took only one, and they drafted a bill that is nothing but a smokescreen. That is how I would describe it.

In closing, the NDP will not be supporting this bill, because we believe we can do better. The resources that resulted from the deliberations of the task force—even though it seems to favour the financial institutions—could be put to better use. We cannot support this bill today.

Financial Literacy Leader ActGovernment Orders

4:40 p.m.

NDP

Christine Moore NDP Abitibi—Témiscamingue, QC

Mr. Speaker, as many of us know, there is a major movement against tuition hikes in Quebec. Student debt is also a hot topic of debate. Could my colleague tell us what would be more effective than this bill when it comes to helping students improve their financial literacy and reaching them for that purpose?