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.
John Baird ConservativeMinister of Foreign Affairs
Mr. Speaker, our government participated actively in the negotiation of this important treaty and was pleased to be among the first countries in the world to sign the treaty.
Preparations are well under way for ratification. In fact we tabled it in this House on February 15. In order to fully ratify the treaty, legislation is required, which we will be introducing shortly for full debate by my colleague opposite.
Elizabeth May Green Saanich—Gulf Islands, BC
Mr. Speaker, like most Canadians we do not want to make accusations but to get to some answers.
I wrote Elections Canada on May 19, 2011, asking for a full national inquiry into what was clearly a troubling pattern of efforts to confuse voters via phone calls allegedly from Elections Canada.
I am sorry, I am having trouble being heard.
The Speaker Conservative Andrew Scheer
Order, order. The hon. member for Saanich—Gulf Islands has the floor.
Elizabeth May Green Saanich—Gulf Islands, BC
Mr. Speaker, if they are looking for evidence, there was an abundance of evidence of a very disturbing event in the 2008 election in Saanich—Gulf Islands. Elections Canada and RCMP officials were unable to get to the bottom of it.
That is why I am asking if the Prime Minister—
The Speaker Conservative Andrew Scheer
The member is out of time. The hon. Parliamentary Secretary to the Prime Minister.
Dean Del Mastro ConservativeParliamentary Secretary to the Prime Minister and to the Minister of Intergovernmental Affairs
Mr. Speaker, a B.C. Liberal candidate wrote in a letter to the editor that Liberals rely on First Contact. First Contact relies on patented technology. The patent and the server are based in the U.S.
That is very interesting because, when I review information on the Liberal Party and its efforts in British Columbia, I see that they have used this company quite a bit. It seems that they were robodialing quite a number of people on behalf of the Liberal Party. They were indicating that they were calling on behalf of the Liberal Party, because it appears that they were.
Nonetheless, the Liberal Party has conducted an unsubstantiated smear campaign. It is reprehensible.
Joe Comartin NDP Windsor—Tecumseh, ON
Mr. Speaker, as you can tell from my voice, I am going to be very brief this week, as opposed to some other weeks. At the outset I would like to note that we have now gone five full sitting days with no time allocation by the government. I want to encourage the House leader on the government side to continue to follow that pattern, perhaps maybe even give us some assurances today that he will follow that pattern.
I have to say, however, that his colleagues in the other House have not been quite so willing to follow that pattern, since I understand that either today or yesterday they began to move a motion for time allocation in the Senate on Bill C-10. I was expecting that we would see Bill C-10 on Tuesday next week. Will that still be the case or will it be coming later?
In addition to that bill, we have had indications from the government that Bill C-30 would be sent to committee before second reading, and I wonder if the House leader could advise us as to when the motion to send it to committee prior to second reading will be coming back to the House.
Peter Van Loan ConservativeLeader of the Government in the House of Commons
Mr. Speaker, I do want to express my amusement, I guess is the best word, at the opposition House leader's great interest in the democratic process in the Senate. Of course, his party's position is that body should be abolished. The one benefit is that if he had his way, Bill C-10 would already be law today. That is something we hope will happen very soon.
Let me begin by thanking the hon. member for asking for the business of the House in the upcoming week. I am happy to provide it to you, Mr. Speaker, to him and, indeed, to all Canadians. This afternoon we will continue debate on Bill C-28, Financial Literacy Leader Act.
Continuing our week focused on jobs and economic growth, because that is what this week is about, tomorrow morning we will resume debate on Bill C-28, the financial literacy leader act, and in the afternoon we will debate the Canada-Panama economic growth and prosperity act, Bill C-24. That bill implements a free trade agreement that was signed almost two years ago, which will create new jobs for Canadians by opening new markets for Canadian exporters and workers. The bill was studied and passed by the international trade committee in a previous Parliament and has been debated on numerous days at second reading in this Parliament.
Monday will be the fifth allotted day, when I understand we will debate an NDP motion. I know members of the House would appreciate it if the opposition House leader could tell us what motion we will be debating at that time. I know I am certainly interested.
On Tuesday afternoon, we will begin debating the protecting Canada's immigration system act, Bill C-31. I also understand that the safe streets and communities act, Bill C-10, will be returning from the other place very soon. We will consider Senate amendments on Tuesday morning and Wednesday. The amendments relate to the civil remedies for terrorism portions of the act, which I understand enjoy support from all parties. Thus I would invite the opposition to agree to move quickly on those items that we all support, so that we can get those provisions into law as soon as possible.
As the House knows, the government committed to passing this bill within 100 sitting days, and we will keep that commitment. Thursday, March 8, will be the sixth allotted day of this supply period, which will also go the NDP, I understand.
Carol Hughes NDP Algoma—Manitoulin—Kapuskasing, ON
Mr. Speaker, I rise on a point of order. During question period, I asked a question of the minister and she accused me of fearmongering. I would appreciate an apology for her false allegation, given the fact that the information I actually provided was from the Nishnawbe Aski Nation, which basically indicates the situation in its communities. Again, I respectfully ask for an apology.
The Speaker Conservative Andrew Scheer
I am afraid that is not a point of order. If the member has additional information she might want to bring to the House, she can do it at a different question period.
The hon. member for Wascana on a point of order.
Ralph Goodale Liberal Wascana, SK
Mr. Speaker, pertaining to matters that arose during question period, there was a fair bit of confusion, indeed obfuscation, about a company called First Contact. In fact there is a Canadian telephone company by that name that does business entirely in Canada. That is the company that was engaged by Liberals and Liberal candidates across the country. There is, unfortunately, another company by exactly the same name that does business in the United States. That company, the Liberal Party did not do any business with.
The Speaker Conservative Andrew Scheer
That is not quite a point of order. It seems like it is a debate as to facts.
I see the hon. government House leader rising. Is this on a different point or on the same point?
Peter Van Loan ConservativeLeader of the Government in the House of Commons
Mr. Speaker, the letter to the editor that was written by the Liberal candidate and read by the Parliamentary Secretary to the Prime Minister actually stated that it is a Canadian company that uses American servers, and that is why American phone numbers showed up on the calls they made. That was the explanation and that is exactly what goes to the root of what we are talking about here.
The Speaker Conservative Andrew Scheer
I have not heard anything that pertains to the Standing Orders or procedures of the House. It sounds like members are disputing what the facts are in a certain situation. They are free to do so but only during question periods and if they are debating a motion relating to these facts. However, they cannot be raised after question period. We are already well past 3 o'clock and question period is over. Members have to make some kind of reference to the Standing Orders or some aspect of procedure they are rising on, not just debate what the facts may be.
The House resumed consideration of the motion that Bill C-28, An Act to amend the Financial Consumer Agency of Canada Act, be read the second time and referred to a committee.
Glenn Thibeault NDP Sudbury, ON
Mr. Speaker, I am pleased to rise today to point out some of the glaring problems in the government's bill, in its attitude to consumer protection in general and in regard to financial literacy specifically.
Obviously, a basic understanding of financial literacy is a good thing. Understanding how much the difference between a 5% and a 5.5% APR will cost over the lifetime of a loan, how long it will take to pay off a credit card if only the minimum payment is made each month, how much one needs to save each month for school or a car or to put money away for a down payment on a house or for retirement is clearly a benefit. The problem is that the government seems to think that encouraging these skills is a suitable substitute for a proper regime of consumer protection, retirement security and a proper strategy for economic growth.
This bill embodies the government's strategy or, more properly, the lack of strategy in addressing the issues that really matter to working and middle-class Canadians across the country. Specifically, the bill would create a financial literacy leader, a high level bureaucrat position, with the aim of encouraging financial literacy in the general public. At the same time, the government is calling on departments and agencies to slash spending. When the media is full of stories of tens of thousands of public servants being laid off, the government's answer to addressing this issue is to create a new, highly paid position. If we could guarantee that the position would be successful, that would be defendable, but there are a number of flaws in this bill, which leads me to believe that this position has little chance of success to start with.
The terms of reference for this position are extremely vague. While the holder of the post would be required to advance financial literacy, there is no definition of what constitutes financial literacy within the bill, nor any attempt to define how we could or should advance it.
Moreover, the original recommendation to create this position was very clear on the need for an advisory council that would include labour, voluntary groups and educators, as well as business stakeholders. They would be there to direct the work of the financial literacy leader. This bill does not include any legislation to create this advisory council and, as such, there is very little in the way of accountability.
Additionally, there is no proviso in the bill that would ensure that this position would be filled by someone who is fluent in both official languages. To me, it would seem necessary that someone who is expected to teach and encourage Canadians about financial literacy would be able to communicate in both French and English.
How able are we to teach financial literacy to Canadians? Human Resources and Skills Development Canada stats tell us that 26% of Canadians struggle with basic numeracy and that 20% struggle with basic literacy. However, the same government that is trying to sell Canadians on financial literacy being the answer to the economic problem is the same one that cut $17.7 million to adult literacy programs in 2006.
Without basic numeracy and literacy skills, how does the government expect Canadians to understand some of the more complex financial vehicles, which will apparently provide for them in their retirement.
Even for people who do not struggle with numeracy and literacy, finance is not a particularly comprehensible subject. As Barry McKenna, a business columnist for The Globe and Mail, states:
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. The average credit-card agreement is as intuitive as quantum physics.
It is clear from all the money spent by banks and other financial institutions on encouraging financial literacy that they see some benefit to it, but to what end? It does not take a genius to conclude that the banks like financial literacy because it allows them to expand their customer base. Encouraging people to take out savings and investment funds creates lucrative fees for banks and brokers. In fact, according to Morningstar, an investment research company, Canadian fees for equity funds are some of the highest in the world, being, on average, around two and a half times higher than fees in the United States.
Financial literacy, in this sense, is essentially a marketing exercise to create good customers. It teaches the benefits of saving vehicles but it is not necessarily critical of how financial vehicles work. It does not criticize plans where fund managers take a substantial fee regardless of the performance of the fund. It does not highlight how funds, like the CPP, regularly outperform private funds. It does not give enough weight to the inherent dangers of investing in the stock market.
As Paul Farrell, a MarketWatch columnist for The Washington Post puts it:
In spite of all the public hype about financial-literacy programs, the fact is Wall Street [or Bay Street] doesn’t want smart investors.
Bottom line: The last thing [its] wants is 95 million investors who are wise to [its]...games. ...revenues would drop substantially if financially literacy really did work.
Even more worrying is the possibility that we increase the quantity of financial literacy available but without ensuring its quality. This has two dangerous and interlinked consequences. The first is that the model shifts all the blame off banks and onto consumers. At the individual level, people are to be blamed for their own uninformed choices and, at the national or even international level, systemic problems are no longer the fault of the banks that lend beyond their means but the individuals who borrowed too much. Obviously, individuals do have a responsibility to manage their own finances but the banks, hedge funds and other financial institutions have the ability to effect the economy in a much more profound way than individual consumers, and we must not forget that.
What do we do for the people who actually end up worse off due to financial investments that fail? We need to understand that some people will lose their savings when businesses go bust or when the stock market drops. This has been the way the stock market has worked since the first recognizable stock exchange opened in Amsterdam in the 17th century.
What about those people who simply do not have the type of disposable income required to invest in their futures, the people who live paycheque to paycheque, the people who have seen their wages stagnate and fall in real terms since the mid 1990s? For both of these groups of people, a social safety net and regulatory system based on so-called financial literacy is a failure.
Lauren Willis, a professor at Loyola Law School, sums up these problems. He says:
For some consumers, financial education appears to increase confidence without improving ability, potentially leading to worse decisions. When consumers find themselves in dire financial straits, the regulation through education model blames them for their plight, shaming them and deflecting calls for effective market regulation. Requiring consumers to act as their own financial experts is socially inefficient.
What should the government do to fix Canada's broken system of financial consumer protection? For a start, it could build on what it is already doing, rather than trying to reinvent the wheel. The Financial Consumer Agency of Canada has already been commended for the work it has done in regard to financial literacy by earning a public service award of excellence in citizen-focused service delivery from the Treasury Board in 2010.
If the government feels that financial literacy is something worth pursuing, why does it not spend money on programs that have already proven effective, rather than starting from scratch in a program that we cannot be sure will be successful and will likely be more expensive due to the financial literacy leader's salary and office costs?
The government should recognize that for a large portion of Canadians a lack of savings is a reflection of the disparity between the rise in the cost of living and the rise in wages over the last 15 years or so. Encouraging savings is fine for people who have disposable income after they have paid for essentials. Unfortunately, however, for all too many people, taking on debt is not a choice. It is the only way to survive.
An OECD report published in 2011 pointed out that the trend toward a less progressive tax structure and a more unequal society here in Canada began in the mid-1990s under the then Liberal government and has continued since 2006 under the Conservatives.
As Canadian economist, Jim Stanford, noted in his submission to the national financial literacy task force:
Personal savings will never constitute an important source of financial security for the strong majority of Canadians who cannot save, given the paucity of their incomes.
This argument was reported by numerous submissions to the task force but these points were noticeably absent from the final report. It simply did not meet the goal of the task force to point out that the very thing it was pushing may not have all of the answers. Financial institutions already make a large amount of money from these individuals who are forced to carry credit card debt from month to month and who are unable to keep the significant balance in their current accounts required by banks to waive the monthly service fees. If the government really wanted to give these people an opportunity to build up their own savings, then it would regulate these types of fees and the level of interest that is charged on credit cards in order to allow people to put aside a bit of money every month.
Similarly, if the government wants to ensure that Canadians have adequate savings when they retire, the way forward is not to create a new and inherently risky vehicle for private savings. There are already multiple methods for Canadians to save for their future, as RRSPs and TFSAs spring to mind, if they have the funds available to invest, and these vehicles are already supported and funded by the government. Studies have shown that the highest earning 11% of Canadians contribute more to RRSPs than the bottom 89% of tax filers combined. Because of the tax benefits of investing in RRSPs, Canadian taxpayers subsidize that contribution by the top 11% of earners to the tune of $7.3 billion in annual net tax expenditures.
The creation of pooled registered pension plans, or PRPPs, would only benefit those people who are already able to invest in their retirement. They would do nothing for the 30% of Canadian families that lack any form of retirement savings outside of the CPP.
Encouraging people to invest in a risky vehicle on the stock market is not real leadership on financial planning. It simply passes the entire risk and blame for an individual not having adequate retirement savings onto that individual. Now we have the Conservatives musing about delaying the age at which Canadians are eligible for OAS from 65 to 67. How can Canadians properly expect to plan for their retirement when the government tries to change the rules of the game?
If the government were truly interested in Canadians' retirement security and in allowing Canadians to properly plan for their retirement, it would make far more sense to say categorically that it will not change the eligibility age for the OAS and commit to the NDP plan to expand the guaranteed Canada–Quebec pension plan by phasing in an affordable doubling of benefits to a maximum of $1,920 a month. This plan has been called for by provinces across the country as it would give Canadians both the ability to plan for their retirement and a guaranteed income to ensure they can retire with dignity.
Moreover, the CPP is a much safer investment than market-based private funds and consistently outperforms the market. Even business columnists, like the aforementioned Barrie McKenna at The Globe and Mail, have pointed out the benefit of such a policy, stating:
And Ottawa could beef up the CPP, mandating Canadians sock away more money for retirement, while benefiting from the CPP's low costs.
However, so far the government and the Minister of Finance in particular have not listened to this appeal for a real and proven way of ensuring Canadians can retire with dignity.
In summary, it worries me that so much time and effort will be taken up by this piece of legislation which is little more than spin carried out by the government. If this were such an important thing for the government to move forward with, I wonder why it could not be included in the financial system review act rather than being a stand-alone act. It appears to me the only reason these did not go together was that the government hoped it could get some positive media out of this legislation. However, as I have pointed out, this legislation is deeply flawed because it does so little to address the real problems affecting Canadians. This so-called solution is the equivalent to using a band-aid to fix a broken leg.
The NDP believes in real measures to protect consumers, seniors and low-income Canadians. Unfortunately, the government is not interested in anything more than spin and publicity when it comes to this issue. At a time when the government keeps talking about spending cuts, I think there are far better ways the government could spend the funds that would be spent to bring forward this proposal.
My colleagues in the official opposition and I will continue to stand up for policies that really help hard-working Canadians. Unfortunately, this is not such a policy, which is why I will be voting against the bill as presented.
Lois Brown ConservativeParliamentary Secretary to the Minister of International Cooperation
Mr. Speaker, I am very pleased that we are having the opportunity to debate this piece of legislation. I personally think that knowledge is power and the more often we can educate Canadians on their financial literacy, the better off we are going to be in the long run.
I am very pleased that many of the banking institutions in Newmarket—Aurora have seen fit to open their premises to hold seminars for constituents. They too believe that knowledge is power and that every opportunity to give people more information about financial literacy is going to be of assistance to them. I am sorry to hear that the opposition is not going to assist.
I note the bill says that we are going to collaborate and coordinate activities with stakeholders to contribute to and support initiatives to strengthen the financial literacy of Canadians. Could the member speak to institutions in his riding which may be looking to partner with us on these initiatives and work with the banking institutions that are there?
Glenn Thibeault NDP Sudbury, ON
Mr. Speaker, I agree there are many institutions right across the country that are having to hold seminars and town halls because of the government's inaction on protecting consumers, because of the government's inaction on making sure that consumers understand their credit card bills.
The government is all talk. I said earlier that it is like cotton candy. The government's action on consumer protection is like cotton candy: it is sweet and fluffy, but there is absolutely no substance.
When we look at the financial task force report, when it talked about creating a financial literacy leader, one thing it said very clearly in the original recommendation was that the leader have an advisory council that includes educators, the banking institutions and business leaders. What is not included in the bill is that recommendation. That being said, we cannot support the bill unless there are more teeth in it.
Raymond Côté NDP Beauport—Limoilou, QC
Mr. Speaker, I must thank my hon. colleague from Sudbury. I admire his candour and his clear-sightedness in the field we are discussing.
As I read the bill, basically I ask myself what the government’s objective is. It is entirely laudable to want to educate people about financial matters, but there is no way that the government can offer any lessons in that regard. It has created an undue proliferation of absolutely needless tax measures and has enormously complicated the federal tax return. The proof is statistics published a few months ago indicating that roughly half of Canadians do not complete their own tax return because it is too complicated for them.
Finally, what is the good of trying to educate people about a system that is already too complicated? I would ask my colleague what he thinks of this observation, and doubtless to elaborate.
Glenn Thibeault NDP Sudbury, ON
Mr. Speaker, I would like to thank my hon. colleague for the question and, as our small business critic, for all of his great work on that file. This relates to small business, to consumers and to all Canadians.
Everyone in this House will agree that financial literacy is truly an important subject and an important issue for all Canadians. However, this bill does not make financial literacy the priority. It makes creating the leader of a financial literacy organization with costs that go with it the priority. There is no talk in this bill about terms of reference that are going to point to what we should be bringing forward, how we should define it and how we should advance it. Those are the things this bill needs to include.
As I mentioned before, the original recommendation from the financial literacy task force talked about ensuring there is an advisory council. This bill does not include that. If we are taking the recommendations of the financial literacy task force, which we also had some concerns with, then we need to ensure those recommendations are there. The member asked his question in French and while I am working on my French, one of the most important things is that this bill does not include a proviso that the person should be able to speak in both official languages.
Mike Sullivan NDP York South—Weston, ON
Mr. Speaker, when I first read this bill I had a lot of trouble trying to figure out what the heck it was about. What on earth are the Conservatives trying to accomplish? They have created a bureaucracy with apparently no goal. There is no definition anywhere in the bill, so far as I can tell, and perhaps the member can tell me what the goal of a financial literacy leader is. What is his or her mandate? What are his or her powers? What are his or her abilities? Who are the stakeholders the person should be consulting? What the heck are they doing? Could the member help me with that?
Glenn Thibeault NDP Sudbury, ON
Mr. Speaker, I too had a similar reaction when I first read the bill. I thought that this bill had actually become a job posting.
The Conservatives are talking about creating, bringing forward and hiring a new financial literacy leader. As the member mentioned, when we go through the bill, the mandate and the terms of reference are extremely vague. There is no definition in the bill of what constitutes financial literacy. We are not talking about how it is going to be advanced, how we are going to move forward with this. Are we going to have an advisory council like the recommendations from the national financial literacy task force brought forward?
We need to ensure that we are consulting with the people who know how to bring forward the topic of financial literacy. Let us have the business community involved. Let us have industry leaders. Let us have educators. Let us have labour. Everyone who would be involved with this needs to be able to have a say and to guide the financial literacy leader. That is not currently in the legislation. That is why we on this side of the House cannot support it, when there is no mandate and it is just spending money.
Lois Brown Conservative Newmarket—Aurora, ON
Mr. Speaker, I am surprised that members say they have read the legislation, because it starts by saying that this is “An Act to amend the Financial Consumer Agency of Canada Act”, which means that this is just a small portion of what that act is all about. I wonder how the member can say that it does not specify, because it states:
“(g) collaborate and coordinate its activities with stakeholders to contribute to and support initiatives to strengthen the financial literacy of Canadians”.
This should be no surprise to the members on the opposite side of the House. We said we were going to bring this forward. It was part of our throne speech. We have been very specific about helping Canadians to understand some of the complexities of what is going on in financial markets and how they can respond as individuals to the things that are happening there.
Does the member not think that helping people get that kind of knowledge, in whatever form it comes, is going to be of benefit to his own constituents?
Glenn Thibeault NDP Sudbury, ON
Mr. Speaker, once again I will reiterate that of course everyone in this House agrees that financial literacy is important; however, the bill does not express that in its mandate. The hon. member talks about collaboration and coordination. It does not specifically talk about the recommendations that were brought forward by the task force. We cannot go with, “Trust us, it's in there”. We have too many examples where it has not happened.
We are saying that right now as it is presented this bill does not do what it is supposed to do, which is provide a complex and mandated way forward for Canadians to improve their financial literacy.