Mr. Speaker, as the member of Parliament for the riding of Renfrew—Nipissing—Pembroke and the beautiful upper Ottawa valley, it is my pleasure to have this opportunity to highlight some of the very important measures in the legislation before us today, Bill S-5, the financial system review act.
We are fortunate in Canada to live in a country with a stable democracy governed by a political party and a Prime Minister who have created a climate in which Canadian businesses can thrive, generating profits and jobs. We respect average Canadians who pay their taxes, work hard and play by the rules, something they expect leaders in public office to do. We are not afraid to stand up against big business or big labour when they break the rules or the laws. We take the time to communicate regularly and honestly with the people of Canada. We have a realistic and uplifting vision of the future of this country, one that respects those who present opposing positions, while at the same time ensuring that individual human beings are treated with dignity.
It is important to keep what we have, that which makes Canada the best place to live in the world today. That includes the public institutions which govern our society. We are fortunate in Canada to have a strong and safe banking system, a system that has been declared the safest banking system in the world for the past four years in a row by the World Economic Forum. The international Forbes magazine has ranked Canada number one in its annual review of best countries with which to do business. Five Canadian financial institutions were named in Bloomberg's most recent list of the world's strongest banks, more than any other country.
The measures in today's legislation would further ensure that our financial system remains a Canadian competitive advantage and that consumers receive the highest possible standard of service. Bill S-5 includes measures that would: improve efficiency by reducing the administrative burden on financial institutions and adding regulatory flexibility; expand the consumer protection framework, including enhancing the supervisory powers of the Financial Consumer Agency of Canada, or FCAC; and update financial institutions' legislation to promote financial stability and ensure Canada's financial institutions continue to operate in a competitive, efficient and stable environment.
The act would facilitate: clarifying that Canadians are able to cash government cheques under $1,500 free of charge at any bank in Canada; improving the ability of regulators to share information efficiently with international counterparts; reducing the administrative burden for federally regulated insurance companies offering adjustable policies in foreign jurisdictions by removing duplicative disclosure requirements; and promoting competition and innovation by enabling co-operative credit associations to provide technology services to a broader market.
As the member of Parliament for Renfrew—Nipissing—Pembroke, a geographically large rural riding in eastern Ontario, one of the issues I deal with on a regular basis is the lack of service in rural areas. Several years ago I found it necessary to contact FCAC regarding the closure of a rural bank. The branch was in the community of Whitney, South Algonquin township, which is east of Algonquin Park.
The closing of the only financial branch in the area represented extreme hardship, particularly for residents without vehicles. Those with vehicles faced a 70 kilometre trip in all kinds of weather to Bancroft, where their accounts were to be transferred. Access to basic financial services is something that most Canadians take for granted. By working together in the community, we were able to come up with an acceptable alternative. A credit union set up a satellite branch in a local grocery store, a location that has better hours and a more accessible location than was previously the case. That arrangement is still working today.
I mention this as an example because the legislation before us today expands the supervisory powers of the Financial Consumer Agency of Canada. In my experience, I appreciated the ability to turn to the agency. I support that capacity and the continuing need to protect financial consumers in Canada.
The determination to continually strengthen our financial system has served this country well. It helps explain why our nation's economy has remained solid and sustainable under recent global stress. However, Canadian banks must also understand that they operate in a highly competitive environment and must be prepared to respond to the specific needs of Canadian consumers.
Our government is committed to ensuring that consumers are protected in their dealings with financial institutions. With the growing array of financial services offered to and used by consumers, making sure that Canadians have the tools and knowledge necessary to be confident in their financial decisions is a priority that we take seriously.
Earlier this month, for example, the Minister of State (Finance) announced that the government is moving forward with several measures to protect Canadian consumers and help them achieve greater control over their own finances. These measures, part of budget 2011, include a proposed ban on unsolicited credit card cheques and a new shorter cheque hold period, taking effect on August 1, 2012 and giving Canadians more timely access to their own money.
The fact is that credit card cheques are considered to be cash advances, which generally incur higher interest rates and fees and do not offer an interest-free grace period. The proposed legislation, the regulations banning the distribution of unsolicited credit card cheques, would amend the credit business practices regulation to require federal financial institutions to receive the express consent of borrowers before distributing credit card cheques. This would help to ensure that Canadians understand fully the terms and conditions of using these credit instruments and the obligations and implications entailed from both a payments and household budget perspective.
At the same time, a new code of conduct on mortgage prepayment information was also announced. The Financial Consumer Agency of Canada, or FCAC, has come out in support of these proposed changes, saying it welcomes the changes the government is proposing to the FCAC act. The changes are technical amendments or clarifications to existing provisions. FCAC would monitor adherence to the code and participating institutions would provide a link on their website to the agency. Lenders would make available a toll-free number so that borrowers could speak to staff members who are knowledgeable about mortgage pre-payments.
This improved disclosure would give Canadians important new details to help them make well informed financial decisions. Mortgage lenders would provide details on any obligations or penalties home buyers might incur when paying down their mortgages. That would include prepayment privileges, an explanation of the charges, a description of factors that could alter charges over time and customized information about the borrower's own mortgage. Most importantly, the code requires this information when consumers are making key decisions, such as at renewal and in annual statements. After all, if people do not understand the information provided to them by financial institutions, we can never accomplish our goal of empowering financial consumers. These regulations would not sit and gather dust on a shelf; instead, they would be overseen by the FCAC