Madam Speaker,
[Member spoke in Cree]
[English]
I rise in support of this motion. This issue has been raised countless times by the people in my riding of Winnipeg Centre. They have raised it because they believe it is important to have equity in our communities, not only in suburban middle-class communities but also in indigenous and rural communities and inner-city communities, where people often do not have as much access to banking services as others.
Postal banking is an excellent idea. I have had hundreds of communications from citizens in Winnipeg Centre about this. We have conducted town halls on this issue, and time and time again people have come out to say they want this for Canadians and for Winnipeg Centre.
Over the last two decades, we have seen a major decline in the number of bank and credit union branches and locations. In 1990 there were 7,964 branches, and by 2002 that number had fallen to 5,908, a decline of 26%.
This is not a good thing for Canadians, particularly rural Canadians. People living in rural areas should be asking their MPs to look into this issue to a greater extent, whether Conservative, Liberal or even NDP.
The decline of branch banking is not only linked to banks' rationalizing of their brick and mortar locations, but also to the rise of ATMs, the Internet and telephone banking. However, we must not forget that even though there is greater access to Internet, many rural communities do not have access to high-speed Internet, which is often required for the use of online banking, or do not even have any Internet at all. This is also true for inner-city communities. I know many people who have a cellphone but do not have access to free Internet service, and it takes them a long time and costs them a lot to access online banking services.
Today there are more than 58,000 ATMs across Canada, and 61% of them are so-called “white” machines owned by non-bank companies. Online banking has grown at a tremendous rate in recent years, with 67% of Canadians now using this form of banking, according to a CBA study. This study also noted that 47% of Canadians now use the Internet as their main means of banking, up from 8% 12 years ago.
While this is a good thing for many Canadians, it does not include all Canadians. We need an inclusive way of banking for all Canadians. For instance, we can look at some of fringe financial institutions. Indeed, many institutions are on the fringe, such as payday loan companies, the Wonga website or Zippy Cash, which can offer loans for 30 days with an interest amount of $40.10 or a rate of over 240% per year, which is an incredible amount of interest in a year.
There are a number of Canadians who do not have access to a bank account. If we take the lowest figure of 3%, which is often put forward, there were an estimated 842,000 people in 2005 without a bank account. Today the number of unbanked Canadians, using the same method of calculation, approaches 910,000 people.
Aboriginal communities remain largely without banks or credit unions across our country. Over the past decade, the aboriginal population has increased dramatically, growing by 21.1% between 2006 and 2011. Some 1.4 million people are now identified as aboriginal, or 4.3% of the Canadian population. However, banks and credit unions have lagged behind in providing them with services. While all the major banks have aboriginal services, there are very few branches on reserve.
There are at least 615 first nation communities in Canada today, and many other Métis and non-status communities. A quick tally of bank and credit union branches on reserve shows there are only 54. That is an abysmal service level by banks, which make an incredible profits year after year in this country. I believe it was $32 billion last year by all of the major banks combined, yet they offer no services to many Canadians who need them. How is one supposed to have economic development if one does not have access to banking services? How is one supposed to cash cheques from the band office if one does not have access to banking service? This is extremely important not only on reserve, but also in inner-city communities.
Many people cannot access or do not have a bank because they sometimes do not have the proper identification. However, if they could find a place to cash a cheque at a low rate of interest instead of having a large charge, then maybe they would be better off in the long term.
Postal banking has deep roots internationally and it is entering a period of expansion. This was shown by a major global study of postal banking carried out in 2012 by researchers of the Universal Postal Union, which Canada is a member of. The UPU report shows that after banks, postal operators and their postal financial subsidiaries are the second biggest worldwide contributor to financial inclusion, far head of microfinance institutions, money transfer organizations, co-operatives, insurance companies, mobile money operators and all other providers of financial services. This is important around the world and it can be important here in Canada.
There are many large and important postal banking operations around the world, from Japan Post Bank, the world's largest deposit holder with 203 trillion yen or $2.15 trillion Canadian in assets, to the Postal Savings Bank of China, the fifth largest commercial bank in China with over 400 million customers, to the Deutsche Postbank, which is now owned by the Deutsche Bank but remains one of the largest in Germany, with its own network of over 100 branches and 4,500 postal outlets.
The study did not examine these banks but looked at five successful models in industrialized countries: the United Kingdom, France, Italy, Switzerland and New Zealand, which have all maintained an important relationship between the financial services offered through postal office outlets at their post offices. These countries have been chosen because of their relevance to Canadian operations.
Postal banking is extremely important. First, there are many Canadians living in large parts of Canada who lack physical access to banks or credit unions. The number of banks and credit union branches has shrunk over the past two decades. In rural Canada, many bank branches have closed in small towns, and while credit unions have purchased some of these branches, this process has slowed markedly in recent years. Because postal outlets are present in both rural communities and inner-city neighbourhoods, new postal banking could offer to citizens and businesses in many communities banking services that do not currently exist. In northern and rural Canada or on aboriginal reserves and in three northern territories, there have always been fewer banks and credit unions than are needed. There are no credit unions in the territories.
Second, it is estimated that some 3% to 8% of Canadians do not have a bank account. This represents potentially more than one million new customers for postal financial services. Many Canadians use fringe financial services at a high personal cost. New postal banking services could be combined with legislation requiring the immediate rollback of FFI interest rates to bring them in line with existing banking rates.
The Kiwibank and La Banque Postale in France are both excellent examples of how a postal bank can offer special services to low-income people for things such as home mortgages, rent to buy, or even social housing loans.
Canada Post has the largest network of retail outlets already in place across Canada. It has a total of almost 6,400 postal outlets in 2012. Of 3,800 Canada Post outlets, 60% are in rural areas where there are fewer banks and credit unions. The post office in these locations could provide key services for individuals and local businesses. Indeed, some communities in Canada have a postal outlet but no other or limited banking services, especially since the closure of 1,700 bank branches and hundreds of credit unions over the last two decades.
Canada Post has a high trust factor among Canadians and an already existing skilled and stable workforce of 68,000 employees, some of whom could easily be trained to handle limited financial services. Thus, it would not mean starting from scratch, but rather building on what already exists.
Also, for a lot of newcomers, postal banking would allow them greater access to services to remit their money back to home countries like the Philippines, India or China, and would ensure that they have access to excellent services as well.
In closing, I would like to highlight some of the comments by the hundreds of people who like the idea of postal banking, such as Candice Feilbert, who says that postal banking is a very smart business plan. Jonathan Klassen says it is an excellent idea. Norris Norden says, yes, banks and all credit unions must do more and allow for greater accounting. Helen Procner Mr. Baltesson say it is a fantastic idea.
[Member spoke in Cree]