Debates of June 1st, 2015

Opposition Motion—Financial Code of Conduct

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, it is good to see that the member is not biased in terms of what he anticipates will be taking place at the end of the year. I would challenge him on his conclusions, I must say.

One of the things that provides competition for big banks is our credit unions, other financial institutions, which are under provincial jurisdiction.

We have a New Democratic government in the province of Manitoba. I wonder if the member might provide some advice to provincial governments of all political stripes, even the NDP, that they should also be looking at ways to deal with the idea of paying to pay. In Manitoba, for example, on the other side, if we get a fine and want to pay the fine, we end up paying to pay the fine. We hope to see that the NDP in Manitoba will try to get that one right also.

Could the member perhaps provide some comments on credit unions, which have done well in terms of providing competition in Canada?

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, I will stick to the federal issues. I deal with a credit union, Vancity, and it provides wonderful service.

One thing I will let this House know is that the Liberals and the Conservatives have been hand in glove with the big banks over the last 148 years that we have existed. I can assure members that it is the NDP, the New Democratic Party, that stands with Canadians, that will stand with consumers, to ensure that their pockets are not being picked by the current government, or as it was previously, by the Liberal government.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Mr. Speaker, what does my colleague think of the fact that 74% of Canadians agree with the NDP? According to the Public Interest Advocacy Centre, 74% of Canadians are opposed to pay-to-pay fees. When the Conservatives realize that they are on the wrong side of public opinion, it will be too late. They will have proven that the NDP is the best champion for taxpayers and the middle class. What does he have to say about that?

[Jasbir Sandhu, NDP, Surrey North, BC]

Mr. Speaker, I will give the member an even bigger picture. I know that 70% of the Canadian population disapproves of the current government. I can assure Canadians that come October they are going to have a government that is for Canadians, for consumers. It will work in the interest of Canadian families, not in the interest of the big banks, which the Conservatives have been doing over the last seven years. If they are sincere about helping Canadian families, let us get this done before we rise for the summer.

[The Acting Speaker, Conservative, Bruce Stanton]

There is only one minute remaining for the hon. member for Winnipeg North. We will give him the remaining one minute, and then we will have to bring this debate to a close.

The hon. member for Winnipeg North.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I will take the one minute and in essence indicate that the Liberal Party, as was indicated at the very beginning, will be supporting this motion.

We talk a lot about fairness, and it is important to indicate that under the Conservative government, middle-class Canadians have had to work longer and harder just to make ends meet. Liberals believe that is just not right and that the government needs to do more in terms of protecting Canadian consumers. There is so much more we could be doing.

Caucus colleagues today raised the issue of advertising and financial literacy, which are so very important. A good government with good priorities would understand that spending a good portion of $750 million on political partisan ads is the wrong way to be spending money. A better priority would be investing in education and promotion of programs that can make a real difference for Canadian consumers.

The Liberal Party desires a strong, healthy middle class, and we should be taking initiatives to achieve that, because a strong, healthy middle class equates to a strong, healthy economy.

[The Acting Speaker, Conservative, Bruce Stanton]

It being 6:34 p.m., it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the business of supply.

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Acting Speaker, Conservative, Bruce Stanton]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker, Conservative, Bruce Stanton]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker, Conservative, Bruce Stanton]

In my opinion the yeas have it.

And five or more members having risen:

Call in the members.

[And the bells having rung:]

[The Acting Speaker, Conservative, Bruce Stanton]

The recorded division stands deferred until tomorrow, at the expiry of the time provided for government orders.

[John Duncan, Conservative, Vancouver Island North, BC]

Mr. Speaker, if you seek it, I believe you would find consent to see the clock at 6:49 p.m.

[The Acting Speaker, Conservative, Bruce Stanton]

Is that agreed?

[Some hon. members]

Agreed.

Motion No. 23

[The Acting Speaker, Conservative, Bruce Stanton]

It being 6:49 p.m., pursuant to an order made Friday, May 29, 2015, the House will now proceed to the taking of the deferred recorded division on Motion No. 23 under ways and means.

Call in the members.

(The House divided on the motion, which was agreed to on the following division:)

Vote #410

Ways and Means

[The Acting Speaker, Conservative, Bruce Stanton]

I declare the motion carried.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

Co-operatives and Mutual Companies

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, on April 2, I asked the Minister of Finance a question to clarify the regulations on the conversion of mutual companies. These regulations were presented on April 28.

Mutual insurance companies have been part of our local economies for more than a century. They were the response from co-operatives when private companies showed no interest in offering insurance products adapted to individuals' needs, and more specifically to farmers' needs. After years of hard work, these companies have become important players in Canada's property and casualty mutual insurance market. Their democratic value and their capacity for innovation, as well as their deep roots in the communities they serve, have also helped them to flourish. Today, Canada has a well-established mutuals sector, which has managed to accumulate significant capital reserves over the years.

However, once again, the Conservative government is letting its ideological opposition to co-operatives shine through by proposing regulations that give incentives for demutualization. My question on April 2 had to do with the two proposed regulations for property and casualty mutual insurance companies, including mutual and non-mutual policyholders, which would establish a legal framework allowing them to convert into corporations. I realize that the government is following through on an announcement it made in budget 2011, in response to demands from the Economical Mutual Insurance Company, which indicated that it wanted to begin a voluntary demutualization process.

My question for the Minister of Finance has to do with his turning a deaf ear to the concerns that have been raised for the past two years by representatives of mutual insurance companies and the official opposition, who see in the government's intentions, in its draft regulations, incentives for demutualization. Why is the government turning a deaf ear?

The mutual insurance companies' capital reserves were established on the collective nature of equity built up over generations. Demutualization under the proposed regulations will benefit only a small group of current title holders and will make them wealthy. The federal government could take Quebec's lead and adopt regulations whereby capital cannot be divided during demutualization, creating an indivisible reserve for the common good and ensuring the sustainability of co-ops and mutual associations.

In that context, I would also like the government, or the Minister of Finance to explain to Canadians why the regulations do not treat all policy holders fairly and why he did not require the capital to be invested in the community or disbursed to other mutual associations, as is the practice in other countries.

[Andrew Saxton, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I thank my colleague for her question and for the opportunity to address her concerns and highlight the measures we have introduced to help solidify the stability and efficiency of Canada's financial sector.

Maintaining Canada's financial sector advantage is especially important as the global financial system changes and adapts following the global financial crisis. Canada must continue to assess the potential impact of new international standards on our ability to compete and attract investment while maintaining confidence in Canada's capital markets.

For seven years in a row, Canada's banking system has been ranked the soundest in the world by the World Economic Forum in its annual global competitiveness report, something that all Canadians can be very proud of.

However, this government believes our resilient financial system can be even better. That is why, in economic action plan 2011, we announced the government's plan to introduce a framework to allow federal mutual property and casualty companies, or P and C companies, to demutualize, following a request by the industry for regulations to facilitate demutualization, a process by which a company governed by its mutual policyholders converts into a share-based equity company.

We sought the views of stakeholders on the appropriate policy objectives for the optimal demutualization of P and C companies. Through this process, we received more than 80 submissions expressing diverse views from a wide range of stakeholders: federal mutual P and C companies, policyholders and employees, industry associations, insurance brokers, accountants, actuaries, the co-operative sector, and many other interested individuals. Some stakeholders indicated that this framework would increase the competitiveness of demutualized companies by providing them with access to equity to grow their businesses.

In economic action plan 2014, we amended the Insurance Companies Act to allow the government to make regulations for a demutualization framework. In addition, the amendments provided a role for the court in a negotiated demutualization process.

In February of this year, our government released draft regulations for comment. These draft regulations provide those companies that may choose to demutualize with a framework that provides an orderly and transparent process and ensures policyholders are treated fairly and equitably. In considering finalization of the regulations, our government will consider stakeholder comments on this draft.

Let me remind the hon. member that demutualization is entirely optional. The decision on whether or not to demutualize will be in the hands of each respective company and its policyholders.

The P and C demutualization framework also respects existing governance rights of mutual policyholders while ensuring that all policyholders with a reasonable interest in the company can participate in, and receive benefits from, a demutualization process. In addition, the framework ensures an orderly and transparent process. It includes a court-facilitated negotiation process for companies with both mutual and non-mutual policyholders.

Policyholders are being kept well informed through various disclosure requirements and have been provided access to external experts. To give time for recently demutualized companies to adjust to their new structures, demutualized companies are required to be widely held for at least two years.

The P and C insurance industry in Canada provides coverage for Canadians when they need it most. It is an industry that our government will continue to support.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I thank the parliamentary secretary for his comments.

What I heard is that the government is once again opening the door to demutualization instead of encouraging mutualization and co-operatives.

We must keep in mind that the capital held by most Canadian mutual insurance companies was built up over many years. How can all of the successive generations that invested in these companies be treated fairly in the demutualization process?

That is exactly why we proposed that a reserve be returned to the community when demutualization occurs. That could help co-operatives and mutual companies grow.

The parliamentary secretary also emphasized the importance of the banking system. We all know that Canada's banking system is very solid, but mutual companies have a role to play in a diversified economy. We do not want a system made up solely of share capital; we also want companies with an alternative structure—grass-roots companies that create jobs.

I would like the government to take that into account and, for the sake of fairness, that it find a way to ensure the survival of mutual companies.

What does the Minister of Finance plan to do to ensure that mutual insurance companies can thrive, remain competitive and offer Canadians—

[The Acting Speaker, Conservative, Bruce Stanton]

Order. The hon. parliamentary secretary.