Mr. Speaker, it is always a pleasure to rise in the House to speak about Bill S-5, the Financial System Review Act, on behalf of all the people of LaSalle—Émard.
One can no longer look at a newspaper without coming across a headline about household debt in Canada. If the storm unleashed by the 2008 laissez-faire financial crisis did not hit Canada as hard as the United States, it is because of the way our financial sector is regulated.
There is an urgent need to maintain and reform the regulation of our financial institutions. In order to do so, the House must firmly commit to getting Canadians involved in the review process and thus help to protect the public, ensure the transparency of our financial institutions and promote the independent review of acquisitions. Finally, we must engage in public consultation to allow various stakeholders—more than just 30 or so— to express their opinions on the impact of the changes proposed by this bill.
I therefore address my remarks to the people of LaSalle—Émard to explain my position on the bill to amend the legislation governing financial institutions.
This Senate bill amends not only the Bank Act, but also 12 other acts. My colleagues in the official opposition have already described several technical aspects of the changes to regulations in the financial sector. I would simply like to go over some of the main points.
Under Bill S-5, large foreign acquisitions will require ministerial approval. The bill will raise the widely held ownership threshold for banks from $8 billion today to $12 billion.
Henceforth, banks controlled by foreign governments will be able to hold a minority interest in Canadian banks and financial institutions.
The bill enhances and expands the supervisory and enforcement powers of the Financial Consumer Agency of Canada.
Lastly, the bill tightens measures to prevent tax evasion in the case of Canadians who do business with subsidiaries of foreign banks.
That said, this bill raises a number of concerns. First of all, why did the government give the Senate, which is full of defeated Conservative candidates, the task of introducing a bill on an issue as important as the review of legislation governing our financial institutions?
Second, will the government give the members of the House the time needed to carefully examine this bill?
To deliver a bill that shows that it truly cares about protecting Canadian consumers, the government must consider adopting measures that are not currently in this bill. Here are some examples: approving large foreign acquisitions of financial institutions cannot fall solely to the minister, as set out in this bill. Such important decisions should be made by the Office of the Superintendent of Financial Institutions without any political interference.
We need to introduce regulatory mechanisms for the banking and financial sectors that are transparent in practice, and not simply in principle. This means we should examine the possibility of regulating all hidden costs and making their disclosure mandatory.
It is also crucial that the committee responsible for reviewing the legislation governing our financial institutions hear from witnesses who are experts on risky mortgage loans, which are of concern to the Governor of the Bank of Canada.
As elected representatives, we have a duty to protect consumers and our constituents. When Canadian financial institutions announced profits of $25 billion last year, debt had become a ball and chain for Canadian households. And if the debt being carried by Canadian households is the ball, middle-class wage stagnation, usurious interest rates, high service charges and incomprehensible loan agreements are what keep Canadians chained to those debts.
Unfortunately, too many people in my riding are among the ever-growing number of Canadians who are burdened by debt. The Association coopérative d'économie familiale du Sud-Ouest de Montréal, with which I met last fall, is on the front line and works with residents of southwest Montreal to find ways of improving their consumer practices and their spending. When people’s wages are stagnant, when their incomes are declining and their debts are piling up, things get more and more difficult.
That organization and the members who work there have heard every story. The people who come to see them are living in dread of the bailiffs who call them at all hours of the day trying to collect. They can no longer sleep at night and they shut themselves away during the day. Some of them have no choice but to consider declaring bankruptcy. The distress is real, and protecting our fellow Canadians must be our first concern.
The most important recommendation I have to make is that the government should use the review of our financial institution legislation to ask what Canadians think and find out what they are concerned about and what issues are of concern to them. In that regard, the government would do well to learn from the best practices developed by the NDP. For example, the NDP has just completed public consultations throughout Canada to find out what Canadians’ concerns are when it comes to the cuts the government is planning to make to the old age security program.
We organized local forums from coast to coast so the people who elected us could talk to us about the impact those cuts would have on them and their family members. For example, very recently, in Ville-Émard, we organized a public forum on reform of our pension system. We had a full house, and we met with 100 of our constituents who were worried about the government’s consistently vague allusions to the cuts it is planning to make to old age security. Our constituents spoke out and we listened to them. The NDP invites dialogue, and the government should do the same when it examines the legislation related to the regulation of financial institutions.
With that in mind, I would have preferred that this bill be drafted after a broader public consultation had been held. In spite of the concerns I have raised, I am going to support the bill, which still represents an adequate review of the financial system. I hope that committee members will have an opportunity to make the amendments that are needed so that the bill will be even more acceptable to Canadians.