Madam Speaker, after that 15-minute break to discuss Bill S-224, I am going to return to my speech on Bill C-69. I want to focus on the division that creates the federal framework for the open banking system and centralizes powers.
As I said before the break, under this bill, banks under federal jurisdiction would have only one set of regulations to follow, whereas an institution under provincial jurisdiction, like Desjardins, would be caught between two governments: the Government of Quebec, for its general operations, and the federal government, for its technological interactions with customers. The fact that these institutions will be subject to two uncoordinated regulatory bodies could be downright dysfunctional and give banks an egregious advantage over co-ops, trust companies, credit unions, Alberta Treasury Branch Financial, and so on. Why always favour Bay Street? This is unacceptable.
Bill C‑69 places Quebec in a dilemma in which there are no good options. If we refuse to join the federal framework, our institutions will stay trapped in the 20th century while their federal competitors step into the technological 21st century. Maybe we could let our financial institutions opt in to the federal framework, but then Quebec would have to waive the right to apply its own laws to their activities that come under the open banking system, which is unacceptable, especially with the Civil Code, consumer protection laws and so forth.
Then there is the worst-case scenario. In order to survive against its federal competitors, an institution like Desjardins could choose to stop being a Quebec institution within the meaning of Quebec's Cooperatives Act and become a federal institution under Canadian co-operative bank legislation. Trust companies would face the same choice. Since the open banking system could eventually be expanded to cover insurance, all of our insurance companies could switch over to federal regulation. That is what is at issue in Bill C‑69.
If this worst-case scenario comes to pass, the entire financial sector and all of its activities will be completely outside Quebec's jurisdiction. That is a serious threat to Montreal's status as a financial hub. In short, by using its power over banks to regulate all companies that interact with them, Ottawa is trying to force Quebec and the provinces out of the financial sector, which it failed to do when it was trying to regulate securities.
Rather than taking the unilateral, centralist route, Ottawa should have chosen co-operation. It could have called a federal-provincial finance ministers' working meeting on open banking. It could have encouraged them to release a joint statement at the end of this meeting in which the governments announce their intention of developing a common regulatory approach with a clear deadline, such as 2025, and possibly setting up a federal-provincial office. It could have sent a clear message to all financial institutions, not just banks, telling them to agree on a common technology, such as a secure data transfer protocol, because open banking is coming. It could have worked on common regulations on accreditation rules for fintech companies, security standards, clarification of financial liability, and consumer and data protection.
We asked the government to take out the division on open banking that centralizes the sector exclusively at the federal level, to take a few months to coordinate with the various players and the provinces and then to come back in the fall with a framework that respects jurisdictions and does not put provincially regulated institutions at a disadvantage. This government rejected our proposal, so now we are going to have to build this new system on a very bad foundation.
Another concern is that, in Bill C‑69, the government delegates the administration of the framework to the Financial Consumer Agency of Canada, an agency that mainly promotes financial literacy and does not have any of the required expertise. In committee, FCAC representatives acknowledged that they did not have expertise in sharing financial data in a way that minimizes the obvious cybersecurity risks. They also told us they do not currently have a plan for developing the expertise needed to oversee the security aspect of open banking.
We also asked several questions that the FCAC representatives said they were unable to answer. For example, since fintech companies are not banks, they are not federally regulated.
Did the government obtain the consent of the provinces, particularly Quebec, which has its own civil laws, before introducing this bill? They are unable to answer.
During the briefing on the notice of ways and means preceding the bill, it was my understanding that provincially regulated financial institutions could opt in to the federal framework provided that the province consents and declines to regulate those activities involving the open banking system. Is that the case? They do not know. They are unable to answer.
Which provincial laws will have to take a back seat to federal laws? They cannot answer this, either.
Who will be tasked with certifying the technology companies? Will it be Ottawa or the Autorité des marchés financiers? They are unable to answer.
Will Quebec's Consumer Protection Act apply to the activities of the open banking system? They are unable to answer. In the event of fraud or damages, will it be possible to launch a lawsuit or class action under the Civil Code or the Consumer Protection Act against a fintech company? Once again, they are unable to answer that question.
Will the sharing of financial liability between the financial institution and the technology company necessitate changes to the financial institutions' prudential standards? Will the Autorité des marchés financiers need to change its rules to comply with the federal framework? Again, they are unable to answer.
None of this is surprising. The Financial Consumer Agency of Canada is not well placed to administer this framework. It learned it would be receiving this role the day before the budget was tabled. When it comes to behaving like amateurs and making things up on the fly, this government takes the cake.
To avoid a disaster or some risky backpedalling, we asked the government to remove this division from Bill C-69. We suggested reworking it this summer and coming back with a good bill this fall. The government refused.
We are opposing this bad bill that sets this entire sector up on a terrible foundation. It is unacceptable.