Debates of March 27th, 2012

Motion in Amendment

[Stella Ambler, Conservative, Mississauga South, ON]

Madam Speaker, it was part of my speech that we would return the authority to the minister to approve these foreign transactions. This is something that did occur previous to 2001 and now we are bringing it back. Canada's sound financial system is a model for the world and we want to ensure that we keep it that way. Returning this oversight is part of the fine-tuning process that is part of this five year review. It simply requires that the minister give approval when a financial institution acquires a major foreign equity that increases its assets by more than 10%.

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Madam Speaker, we raised an issue earlier in debate and at committee where we had some representation on it. We saw a story again today in the media on the concerns with the state of the Ombudsman for Banking Services and Investments and the fact that it is the only independent body set up to protect the interests of consumers as it relates to the practices of banks. However, two major banks have now pulled out of that arrangement.

When we have asked questions, the minister has said in the past that he will set up some other kind of accountability mechanism. However, he has not yet done so and we are concerned, the banks are concerned and consumers are concerned. The fact is that the government has not moved on it. I wonder if the parliamentary secretary could give us an indication on the direction of the government.

[Stella Ambler, Conservative, Mississauga South, ON]

Madam Speaker, this legislation would protect consumers. One example is the ability of Canadians to cash cheques up to $1,500 free of charge at any bank. It also would increase the maximum penalty for violation of consumer provisions in the legislation.

Aside from those consumer protections, I want to assure the member opposite that it is because of the actions of this government that we have the most sound financial system in the world. We also have, in our Minister of Finance, the world's best Minister of Finance, and, because of that, in 2007 we began the major overhaul of this act that resulted in the kind of banking system we have today, praised by the World Economic Forum as one of the best in the world.

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Madam Speaker, languishing the praise on the Minister of Finance is pretty cute because, in 2006, we know the Minister of Finance recklessly followed the U.S. lead and brought in the 40-year, zero down mortgages fuelling Canada's personal debt and housing bubble, which certainly did not help a lot of Canadians. Canadians are feeling the impact of that now.

We know that, while in opposition, the Conservatives continually pushed the Liberals to follow the U.S. lead with deregulation of the banking system. When did the light come on for the Conservative government to understand that the banking system in this country stands apart from those in other nations? For years, they chased the deregulation bus.

[Stella Ambler, Conservative, Mississauga South, ON]

Madam Speaker, my understanding is that the U.S. is actually following our model. In fact, President Obama has indicated publicly that he has great respect for our banking system, which I think is, in large part, due to this government's actions, not only in the review of the financial system review act but in all cases our economy is moving forward, has grown and has led the G7 because of the actions of this government.

[Scott Brison, Liberal, Kings—Hants, NS]

Madam Speaker, it is a pleasure to rise today to speak to Bill S-5.

This legislation does not make significant changes to the Canadian banking system. In fact, the Canadian banking system is probably, if not the most, among the most prudentially sound banking systems in the world.

That is something all of us as Canadians recognize as being important to our Canadian economy. I believe it is good for Canadian jobs. It is good for our role in the world and our influence on the world. The growth in the scale and success of Canadian banks compared to other banks in other countries, in other banking systems, in recent years has been remarkable.

It is important to recognize why that is the case. While I agree with the Conservatives when they say that the World Economic Forum and other international fora recognize that Canadian banks and the Canadian banking system are among the best in the world, where I differ from them is on the genesis of why that is the case.

The reality is that during the 1990s, when the global trend in the U.S. and Europe was to go to rampant deregulation, it was the Canadian government that said no, that refused to follow the lemmings in other countries off the cliff.

In Canada, the Chrétien government, with Paul Martin as finance minister and Jean Chrétien as Prime Minister, was under immense pressure to follow the global trend of deregulation. They said no to that. They disagreed with that because they did not believe it was in the interests of Canadian bank customers, in the interests of Canadian small business or in the interests of ultimately the prudential strength of Canadians banks to do that. The decision was made not to deregulate at that time, and thank goodness that was the case.

It is important to realize that there were many members of the Reform Party or the Canadian Alliance Party. I forget what it was at that point. They were in fact opposed to the government and the decisions at that time.

I will be the first to offer a mea culpa from my perspective, because there were times when I was critical of the government's caution at that time. I will be the first to admit that when I criticized the government for its caution at that time, I was wrong. I will admit I was wrong, and I will not take credit personally for the decisions made by the Chrétien and Martin team at that time. I was wrong; they were right.

I just wish that at some point the folks on the other side, who were also wrong at that time, would admit that they were wrong and Mr. Chrétien and Mr. Martin were right. I do not take credit personally for the fact that some very strong and sound decisions were made by the Chrétien and Martin government, because I was criticizing those decisions at the time.

Again, I was wrong. Mr. Chrétien and Mr. Martin were right and the Liberal government was right. All I am saying is that when the government speaks of, and boasts of, the prudential strength of Canadian banks and our reputation in the world, it ought to do the same thing, have the same journey I have gone on where we embrace our inner honesty and expunge our inner hypocrisy, and we feel so much better. It is completely cleansing.

Let us look at what happened in the nineties. The reality is that the Chrétien and Martin government did the right thing by not following the global trend of deregulation.

There are some other reasons why Canada is doing well and our financial services sector is doing well. Part of it is that there is a massive global trend for commodities, and we have a lot of commodities in Canada: oil, gas, mining. Just in mining finances, 80% of all the mining transactions, financings, in the world over the last five years were transacted in Toronto.

I was in Calgary last week. I met with some oil and gas finance companies and some oil and gas companies. Calgary is booming in terms of oil and gas financing.

None of us in this House, not even the Conservatives, can legitimately take credit for putting the oil and gas under the ground or the minerals or potash under the soil. The Conservatives cannot say they put the oil and gas under the ground in Alberta or the potash under the ground in Saskatchewan. We all know they did not put the oil and gas off the coast of Newfoundland and Labrador. That was Danny Williams.

The reality is that we have to be honest with each other about why we are doing well as a country. Two of the reasons are that we have a strong banking system and we have become the global centre for mining and for oil and gas transactions. That is all very good.

In this bill, specifically, one of the changes the government is making is the decision that takeovers of foreign banks by Canadian banks will be subject to not public servant scrutiny in some cases but will go to the minister's office. The minister's office will make the determination, depending on the size of the transaction and the size relative to the Canadian bank's assets. It will not be OSFI, as an example, in the public service that will have the decision to make; it will be the minister's office.

I can understand the rationale from some perspectives. The government may see that as an extra level of precaution in terms of the minister's office, but I have a concern. I raised this at committee, the politicizing of these transactions. We know Canadian banks have been very acquisitive in recent years. We have seen the Bank of Nova Scotia buy all the Royal Bank of Scotland's assets in Colombia and more recently a significant retail bank in Colombia. The Bank of Nova Scotia bought 20% of the Bank of Guangzhou for $700 million in China a few months ago.

We are seeing that happen, and that is generally a very positive news story in terms of those head office jobs that will be here in Canada and the opportunity for us to strengthen our influence, financially and in business around the world. However, I want to see these transactions judged based on prudential strength, not on politics and other issues. I think we have be careful with that.

Another thing, when we are talking about the banking system, is that one of the biggest concerns we have is the level of personal debt Canadians are carrying right now. There is $1.50 of debt, on average, for every $1.00 of annual income in Canadian families. That is at a record high. That is actually higher than that of our American friends, who are less indebted personally than Canadians today. Canadian families have the highest level of debt. It is higher than the personal debt levels of Americans.

We have historically low interest rates today. People are struggling just to get by today. A lot of people have lost their full-time jobs. They have seen their full-time jobs replaced by part-time work. We have seen a bifurcation of the Canadian economy where for people who are in Alberta or Saskatchewan, which have a lot of natural resources, it is a very different kind of economy than if they were in Ontario or Quebec or the Maritimes.

The reality is that one of the reasons why we have seen growth in personal debt is not that Canadians are going out and buying big screen TVs and boats, as the Minister of Finance said when he blamed personal debt levels on Canadians' profligate spending on big screen TVs and boats. It is not that. It is that a lot of Canadians have lost their full-time jobs, which have been replaced by part-time work.

The other factor is that the government has sent signals to Canadians and in fact has changed the rules and regulations around lending to actually encourage Canadians to take on more debt. In his first budget in 2006, the Minister of Finance brought in 40-year mortgages with no down payment, for the first time ever in Canada.

The government has to take some responsibility for the growth in personal indebtedness and the degree to which Canadian citizens and families are leveraged financially today, because it changed the rules in 2006 to 40-year mortgages—

[The Deputy Speaker, NDP, Denise Savoie]

Order, please. I must interrupt the hon. member. His time has elapsed. Perhaps in response to questions and comments, he can complete his comments.

Questions and comments, the hon. member for Algoma—Manitoulin—Kapuskasing.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Madam Speaker, I was listening to my colleague and I am glad they admitted they were wrong. We always like to hear that.

I want to talk about the amendment we have put forward, which is about transparency and accountability. I am wondering if my colleague could talk a bit about that, the fact that it is an amendment that should be put forward and one that we hope the government will actually support.

[Scott Brison, Liberal, Kings—Hants, NS]

Madam Speaker, just to give the hon. member some background, I was elected in 1997 as a Progressive Conservative, and I was elected again in 2000 as a Progressive Conservative, but at the time of the merger in 2003, I bolted. I got the heck out of there and joined the Liberal Party because I wanted to belong to a moderate centrist party.

Just to clarify, yes, I personally was wrong in the late 1990s when I was opposing some of the decisions made by the government, but I am tremendously proud to have learned and not only to admit my past mistakes but to embrace the strong, prudential policies of the Liberal Party when it comes to the financial institutions of banking.

Specifically to her question of any amendment that will strengthen transparency and accountability, I do not expect the government to support anything that will strengthen accountability or transparency. This is the most secretive, least accountable government I have ever seen. I have never, in almost 15 years in Parliament, being both in opposition and government, witnessed a government that would not provide even the costs of its legislation to the House of Commons and has to be dragged kicking and screaming and, in fact, has been found in contempt of Parliament.

I appreciate the hon. member's party amendment for greater transparency, but I am concerned that the government will not understand or appreciate that.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Madam Speaker, I listened with interest to my colleague's speech. When I listen to the Liberals talk about their past, it reminds me of an old song, Glory Days. I want to remind him of those things. Though they like to take a lot of credit for things, oftentimes circumstance bears a big part of it as well.

I appreciate, as I said, the hon. member's speech and his work in committee, but the Liberals seem to bring up 40-year mortgages that were enacted in 2006. To set the record straight, I wonder if the hon. member would agree with me that it was changed again to 30 years by the current government to better reflect the circumstances in the financial world today. I wonder if he would mind setting that record straight as well.

[Scott Brison, Liberal, Kings—Hants, NS]

Madam Speaker, I enjoyed working with the hon. member at committee. He comes from a small business entrepreneurial background and brings some good common sense to committee. I have always found his interventions to be valuable.

On this particular intervention, yes, the government did reverse the decision it had made initially to extend 40-year mortgages with no down payment for the first time in Canadian history. In fact, I would ask the hon. member to speak with the finance minister and urge him to actually say the Conservatives were wrong when they pushed for and changed the rules to 40-year mortgages with zero down payment. The only thing that changed their mind was when the bottom fell out of the global banking system. That was the only thing that changed their mind. They were saying, “Giddy-up, let's go. Let's rock and roll. Let's join the global trend of deregulation. The Liberals wouldn't let us do it, but by gosh, let's get on that horse and ride off over the cliff”. Thank goodness, they did not have a lot of time before the global financial crisis to do more deregulation of that sort, but I am sure the hon. member will agree with me that it was the right decision to reverse their earlier bad decision.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Madam Speaker, I want to remind the House that it was this Minister of Finance who, when pressed about imposing taxes on all financial transactions around the world, led the charge in telling governments around the world that would not be a good idea in financially difficult times. Therefore, we certainly trust this Minister of Finance to do the right thing, not only in the interests of this country but also around the world.

I am grateful to have this opportunity to lend my voice to today's debate on Bill S-5, the financial system review act.

In many ways, today's act can be seen as fine-tuning an already mature, stable and sophisticated financial system. As members are aware, our financial sector has been the envy of the world during the recent worldwide economic crisis and this legislation continues to build on and enhance an already strong system.

By way of background, I would note that the government reviews all legislation governing federally regulated financial institutions every five years, to ensure the stability of the Canadian financial services sector. Today's act is the product of the latest five-year review, which began in September 2010 with an open, public consultation. It is imperative that this act be passed by early April as there is a sunset clause in the existing legislation. The four principle acts that govern the financial sector, the Bank Act, the Insurance Companies Act, the Trust and Loan Companies Act and the Cooperative Credit Associations Act, all have their sunset dates renewed for five years.

Bill S-5 also contains changes to federal statutes such as the Financial Consumer Agency of Canada Act, the Office of the Superintendent of Financial Institutions Act, the Bank of Canada Act, the Canada Deposit Insurance Corporation Act and the Canadian Payments Act.

Not so long ago Canada's financial system was considered too conservative and small to be doing business on a global stage, but not any more. Now Canada is recognized and celebrated beyond our borders for having a strong and stable financial sector. As we all know, over the past four years the World Economic Forum has ranked our banking system as the soundest in the world. Forbes magazine has ranked Canada as number one in its annual review of the best countries to do business. The IMF as well has heralded Canada's financial system and its oversight. It states:

The Canadian banking system was able to withstand the international crisis well, and the authorities have continued to monitor risks closely.

We can be rightfully proud of the reputation we have in this area, but that does not allow us to rest on our laurels. We must constantly update our regulations, and Bill S-5 reflects our government's commitment to this effect. Growth in the industry necessitates constant diligence within our regulations and laws.

Canada's financial sector is now operating on a truly global scale, diversifying its customer base and taking best practices to countries around the world. The Prime Minister's recent tour of China promoting our economic ties there provides an excellent and timely example of this outward growth and the Canadian financial system's increasing influence in that Pacific economic superpower. While in Beijing recently, the Prime Minister announced the conclusion of negotiations toward a Canada–China foreign investment promotion and protection agreement. This agreement is a treaty designed to promote Canadian investment abroad through legally binding provisions as well as to promote foreign investment in Canada. By ensuring greater protection against discriminatory and arbitrary practices and enhancing predictability of the market's policy framework, the agreement allows investors to invest with greater confidence. Canada has consistently supported strong, rules-based investment through the negotiation of such agreements. Once fully implemented, the Canada–China foreign investment promotion and protection agreement will facilitate investment flows, contributing to job creation and economic growth in Canada. China is now Canada's second largest merchandise trading partner and our third largest export market.

Trade in financial services has been a key part of that growth and can be expected to grow continually in the years to come. Direct investment between Canada and China has increased substantially in recent years and there has been progress with respect to portfolio investment, as well as under China's qualified domestic institutional investor and qualified foreign institutional investor programs.

Just as they are doing elsewhere in the world, Canada's financial institutions are increasing their presence in China. For example, Scotiabank recently won a bid to purchase a key stake in a bank, a major Chinese financial institution with more than four million customers. In 2010, the Bank of Montreal became the first Canadian bank and one of only three North American banks to incorporate in China. In 2010, Sun Life Everbright more that tripled its reported gross life insurance business in China through its 19 branches. The company provides insurance, covering over nine million customers. In 2011, Manulife announced licences for its joint venture, Manulife-Sinochem Life Insurance Company, to enter five new cities in China, bringing its total presence to 49 cities across 12 provinces with a total population of 350 million people. Last year, the TSX opened offices in Beijing to advance Canada's capital markets. Last year, Power Corporation of Canada purchased a 10% stake in the China Asset Management Company, the country's largest asset manager.

Chinese financial institutions are also coming to Canada to invest because of our pro-trade environment. Indeed, last year, the China Investment Corporation announced the opening of a Toronto office, representing the first permanent foreign location for this huge Chinese financial institution. In the words of the president of the China Investment Corporation:

There are countries with comparable economic characteristics to Canada, but with a lot less friendly environment. In our dealings with the Canadian government, various parts of the government, with the business people, we feel that it’s a lot more congenial to our investments.

Canada's financial services industry is merely one example of an industry whose horizons have broadened significantly. As the Prime Minister's recent visit made clear, these efforts are reaping results.

Here at home, we are making the necessary adjustments to foster this growth. That is why today's bill would reduce the administrative burden. For example, federally regulated insurance companies offering adjustable policies in foreign jurisdictions would be relieved from providing duplicate disclosure requirements.

In the years to come, though it is already an attractive place for trade and investment, Canada will become an increasingly attractive choice for trade and investment, including financial services.

Being a prime choice for trade and investment does not happen easily, but here in Canada it happens for several reasons. First, we have relatively solid economic fundamentals compared to most of our peers, especially among the G7. Over 610,000 more Canadians are working today than when the recession ended, resulting in the strongest rate of employment growth by far among the G7 countries. Even better, nine of ten positions created since July 2009 have been full-time positions, with close to 80% of those being in the private sector. Real GDP growth is now significantly above pre-recession levels, the best performance in the G7. We have also reduced red tape, and we continue to promote free trade through not only our tariff changes but also our free trade agreements.

I am proud that our Conservative government has signed free trade agreements with nine countries and that we are in negotiations with an additional 50 countries, including India and the European Union. As chair of the Standing Committee on Foreign Affairs and International Development and a former member of the international trade committee, I have seen first hand how these trade agreements strengthen our economy and provide Canada with a greater voice on the global stage.

I am also proud of our low tax plan, which has resulted in Canada now having an overall tax rate on new business investment substantially lower than that in any other G7 country, and below the average of the member countries of the OECD. This low tax plan is about making Canada a strong destination for investment and jobs, not driving businesses and jobs away with massive tax hikes like the NDP proposes.

Bill S-5 will ensure that our financial system remains a critical element of our success and maintains its place in the ranks of global leaders.

If we look at what the government has been doing over the last number of years, as I mentioned earlier, lower taxes and reduced red tape have been important. Nonetheless, there have been many other things that the Prime Minister and the government have done, including trying to resolve border issues with the president of U.S., for example, so that our goods can flow more freely across our borders. I also mentioned the additional places to sell our goods through the variety of free trade agreements, as well as our continued commitment to maintaining a strong and stable banking system.

As we look at these things there are also R and D investments that we continue to make. We realize that the way we are going to move forward is by being able to commercialize some of these R and D opportunities.

We realize that a strong financial sector is not only important to business but also equally important to all Canadians, who depend upon it for jobs and for their daily financial transactions.

I encourage all hon. members to support this important legislation and see that it is passed.

[Dennis Bevington, NDP, Western Arctic, NT]

Madam Speaker, I listened to my colleague's speech with some interest. I think financial issues are always important. Nonetheless, it is also very important to have the correct data.

As the Conservatives have said over and over again as their mantra, they have created 600,000 jobs since the recession. I know they are pleased about that. However, they have presented that point in a context that is not correct. They do not talk about the expanding nature of the workforce. If they had mentioned that fact they would then have been led to actually talk about the unemployment rate, which is about 2% higher than it was before the recession. Therefore, when they say we have had a full recovery and everything is going so well, that is really not the case. They are using figures in that fashion and hoping that by saying them over and over again as their mantra, everyone else will agree.

We do not agree. We think that when financial information is presented to the House of Commons, it should be done correctly and adequately so that the people of Canada can understand what is happening in the economy. Does my colleague not agree with that?

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Madam Speaker, in terms of numbers, my colleague from Western Arctic mentioned 600,000. We believe that the number of new jobs created is actually closer to 610,000.

We all understand that this has been a particularly difficult time around the world. I am concerned what would happen if the NDP were actually in government at a time like this. Would there be more taxing and spending? Would we actually see the kind of growth we have had?

We know that many countries have been affected by this recession. The good news is that our country has recovered far faster than any other country.

Are there more things that need to be done? Yes, by all means. We will see some of them in the budget that will be presented here in a couple. We will continue to build on the success we have already had, including working to create new jobs, because that is of paramount importance to this government. We will continue to reduce red tape, as we have mentioned, and create more opportunities for Canadians here at home.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, we spend a lot of time talking about banks when discussing this bill, and for just reason. Even so, I am interested in hearing a comment on the whole area of credit unions.

Credit unions have played a significant role filling in where a lot of banks, and the banking industry as a whole, have been closing down some of their branch offices. Many of the constituents I represent want to see a larger role for the Assiniboine Credit Union, the Steinbach Credit Union and credit unions in general.

I wonder if the member would comment on credit unions in regard to this particular bill.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Madam Speaker, credit unions do play a vital role. I bank at a credit union and I think they provide an important role.

When we look at context of what we are dealing with here today, all that is being done by this government bears mentioning again. Making sure that our banking system is stable is just one of those mechanisms. The other measures that we need to look at are cutting taxes; continuing to spend money on R and D; and creating opportunities for our goods, which means reaching free trade deals around the world. There is a whole combination of initiatives we need to take to continue to make our economy strong and to provide an opportunity for us to continue to grow in the future.

[Greg Rickford, Conservative, Parliamentary Secretary to the Minister of Aboriginal Affairs and Northern Development]

Madam Speaker, there are some really technical pieces to this legislation. Amongst those technical pieces are measures such as thresholds for bank ownership and ownership thresholds on financial institutions.

Can the member tell me why the large bank ownership threshold is being increased as part of this piece of legislation?

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Madam Speaker, as we look at the changes taking place around the world, it is important that we continue to keep pace with them. One of the reasons we are looking to increase thresholds from $8 billion to $12 billion is to reflect growth in the sector and to ensure that we keep up with those requirements as we continue to grow.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Madam Speaker, I would like to begin with a quotation from Mr. Hollande, the socialist party candidate in the French presidential election. He said:

...my real adversary has no name, no face, no party. It will never run for office, will never be elected, and yet it governs. My adversary is the world of finance.

We had a golden opportunity to make major legislative changes that would have benefited all Canadians, not just the financial institutions as institutions, but also the people who use them, the people who need them, the people who deal with them.

The first problem with this bill is that it comes from the Senate, an unelected institution that does not include a single NDP member even though the NDP is the official opposition. Naturally, as a New Democrat, I have issues with that. We have been left out of the back-room-election-making and fundraiser-ticket-selling club. We are not there, and that is a shame.

This also means that those people are not listening to Canadians. They are not accountable to the public nor did they even hear from them. This bill was introduced surreptitiously, but Canadians deserve more. They deserve to see more studies, more deliberation and much more ideological exploration. The people in the other place did nothing more than gather a few technical facts. They did not ask any questions about how Canada's future should look in terms of wealth distribution. No such questions were raised in the Senate. Those people are not accountable to Canadians. That is the first problem.

Let us also talk briefly about something much more serious. At present, the large corporate financial institutions, taken together, have access to a pool of $500 billion. That $500 billion is not being used at this time. If only a small fraction of that money were invested in industry, this would generate substantial economic gains for Canada. Instead of exporting Canada's raw materials, we could process them right here. But the financial sector is not interested in making that kind of investments.

The question is whether we want speculation and foreign takeovers and purchases, or whether we are simply trying to build a modern, competitive industry. This would have been an interesting question. It would have been appropriate to bring in regulations to limit increases in speculation in order to steer our financial capital towards what our industrial capital needs. That is not the case here. Unfortunately, that is never the case with the Liberals or the Conservatives. They are always seeking immediate gain. It would have been better to look more than just a few years ahead and to look at what we can do better. None of that was considered in this bill.

There is another problem. In Canada, the co-operative sector plays a major role. It was introduced, in the past, in Canadian operations. There is also the phenomenon of mutualization inherent in the co-operative system. It is not protected and that is too bad. The co-operative system needed to be protected from privatizations whereby all the capital of past generations is divided among the current owners or members of the co-operative. This means that all the sacrifices made by past generations in order to create a co-operative will be distributed to a few individuals. There have been some abuses in the past, there are some happening in the present and, unfortunately, there will be some unacceptable abuses in the future. There is no mention of that, but it is a financial sector that deserves to be defended.

Where do consumers fit in all this?

Households are currently overloaded with debt in part because of the inflated value of homes and the speculative nature of purchasing a home. People are taking on too much debt and that debt is not going down.

Unfortunately, this is triggering bankruptcies at a time when salaries are stagnating and prices are increasing, including the cost of borrowing. As a result, the Canadian financial system is becoming an aggressive force against consumers. Consumers are paying dearly: 19% interest on credit cards, very low interest rates on deposits, extremely low returns on RRSPs. All these flaws remain unaddressed.

The bill could have addressed credit cards. By all accounts, 19% interest on credit cards is excessive. The bill could have put a cap on the glut of credit that causes people to go further into debt. This could have been limited or tightly regulated. That is not the case.

With respect to holds on deposits, apparently the fact that a $1,500 federal government cheque will not have to be held, that financial institutions will be required to deposit it immediately, is a major development. However, this was already included in a previously passed bill. It is not a major development.

The representative of the Standing Committee on Finance, the member for Saint Boniface, made it sound as though this was a significant improvement. Representatives of the Office of the Superintendent of Financial Institutions told her that the only problem was that it was already being done, that the amendments to these laws are already reflected in current practices and that there were no improvements. That is a major problem. Much more could have been done.

There is also the matter of one-week holds on deposits of corporate paycheques. This period is far too long. It could have been reduced through regulations. There are abuses and red tape. This government boasts about wanting to minimize red tape and, in this instance, it has failed big time.

Finally, there is no mention in the bill about a whole host of new financial products, such as commercial paper and derivatives. That is dangerous. The Conservatives say that our financial institutions are highly regulated and that our system is doing well because of regulations governing our access to credit. That is fine, but the bill deals with financial products that already exist.

As we saw in 2008, the problem lies with all the financial products not governed by any regulations. This proved to be very costly for Canada, and people are still paying the price, especially in their RRSPs. These plans and Canadian pension funds sustained major losses. The situation has not been addressed by this bill, which does not protect consumers. The bill does not protect pension plan members. It only protects a financial system that wants rapid and massive growth, looks for the quickest profits, and is not interested in the general prosperity of Canada, only in the prosperity of its financial institutions.

In view of the fact that the legislation will be reviewed in five years, we have missed a good opportunity to finally meet our economic needs and to come up with something useful, if only in terms of available capital, ensuring that the industry has the means to promote investment. This would help Canada in these times.

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Madam Speaker, I appreciate that my colleague, who is an active member and participant in the finance committee, brings a lot of passion to his role and our role in trying to ensure that the financial legislation and efforts we make here with respect to proper and accountable banking rules and regulations are put forward in a good common sense fashion.

Could he comment on what appears to be nonchalance on behalf of the government as it relates to legislation like this, which it likes to class as technical in nature and therefore not that important? The government could have done what he already has suggested, which is move forward with some real and proper protections for consumers. Could he comment on that?

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Madam Speaker, there was indeed a golden opportunity to limit some types of abuse. Good heavens, how can I say this in a way that is polite and parliamentary? Clearly, there are sharks in Canada and, unfortunately, consumers are the goldfish in the aquarium. And yet, the government is not making any changes.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Madam Speaker, the hon. member spoke to us about household debt, and also about some kinds of unregulated speculation. Could he elaborate on this shortcoming in the bill?

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Madam Speaker, right now, the entire bill oriented toward speculation or immediate gain in the financial sector.

In the real estate sector, the decision was made to promote housing accessibility. That is fine, but unfortunately, more and more people are overburdened by debt as a result of interest rates and business practices. The average household debt to income ratio has now reached 125% or even 150%. This ratio is over 175% in the Vancouver area because of a significant housing bubble. That is unacceptable. We are about to hit a wall. If the Canadian housing bubble ever bursts, the entire Canadian economy will suffer.

[Greg Rickford, Conservative, Parliamentary Secretary to the Minister of Aboriginal Affairs and Northern Development]

Madam Speaker, I appreciate the member's intervention today. As he said earlier, there are a number of technical aspects to this, and he spoke about some of the things that he viewed should have been done. However, there were some key things that were accomplished through the legislation that were different from previous versions of the legislation. One of those was the approval of foreign acquisitions by banks. Under this legislation, the authority to approve foreign acquisitions by banks is being returned to the minister.

In his appreciable understanding of this legislation, why does he think that is important?

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Madam Speaker, all in all, with all due respect to the Conservative member, what was important was the approval by the Superintendent of Financial Institutions. The fact that this operation is being politicized does not seem particularly relevant. What was really important was approval by the Superintendent of Financial Institutions and the criteria upon which that approval was based.

The NDP wanted to point out that this measure needed to be good not only for the health of financial institutions but also for Canada's economy. Our colleagues on the Standing Committee on Finance found that it was unacceptable for the government to simply say that this would be good for the Canadian economy. I find this situation to be extremely unfortunate. The truly critical element was the criteria upon which the approval would be based.