Monte Solberg

[Bank Act, April 17th, 1996]

Mr. Speaker, it is a pleasure to speak to Bill C-15 and to talk about financial institutions.

This may seem like a fairly dry debate to many people but I think it is an important piece of legislation and it is important to talk about it. Perhaps it is important to talk about it in the context of what Canadians want with respect to financial institutions.

There is a lot of talk today about financial institutions. When the banks announce their profits we hear a lot about it when we go on our tours throughout our constituencies.

There are two things Canadians want with respect to their financial institutions. First is stability. They want to know their money is secure in those institutions whether they be banks, trust companies and so on. Second, they want to know those institutions are accountable, that they are open through the process of competition. There are a number of reasons for that.

People want to know that service fees for instance are as low as they possibly can be. They want to know they are getting the best possible return on their money. They want to know on the other hand that they are being charged the lowest possible interest rates when they borrow from the banks.

The idea is to balance the two as best we can so that we do not end up with the situation which occurred in the United States. There was the savings and loan debacle where a lot of people potentially could have lost billions of dollars until the United States government stepped in. On the other hand we want enough competition to hold all these various financial institutions accountable.

The one area where Bill C-15 really falls down in my estimation is that it simply does not offer co-insurance. Co-insurance is simply an insurance scheme which would replace CDIC insurance as it presently is now. It would on the one hand still provide insurance for possibly up to 90 per cent of people's money through the government but it would leave a certain amount that would have to be covered by the banks or the financial institutions themselves. In my judgment this would be very good. It would hold those financial institutions accountable.

It is interesting to note that before 1967 when CDIC insurance was put into place this country did not have a single bank failure. After 1967 when CDIC insurance came in, 30 financial institutions ended up failing in this country.

What CDIC insurance unwittingly did is it gave people a false sense of security in those institutions. Consequently, they were not held accountable. People did not really know what kind of inherent risk there was in putting their money into them. As a result they folded. The government was on the hook for them through CDIC insurance. The result was something like $5 billion being paid out. In fact at this very point something like $1.7 billion is still owed to the federal treasury from CDIC insurance. It is a very serious situation. In the past we have had many failures and it has cost taxpayers a lot of money.

The really important issue here is that this bill does not provide co-insurance. There is wide support for the idea of co-insurance. Several different groups have come out in favour of co-insurance, not the least of which are the banks themselves. People as diverse as those from insurance companies, the superintendents of financial institutions, the chairman of CDIC, the Canadian Institute of Actuaries and all kinds of academics have come out in favour of co-insurance, as has the Senate banking committee. There is widespread support for the idea of co-insurance. That is why it is very disappointing that Bill C-15 does not have any mention of co-insurance.

It is important when we are talking about something which is a new idea or concept that we be able to look either in Canada or elsewhere in the world for examples of whether or not this will work. There are some examples right now in the U.K. and Ireland where there is co-insurance and it works extremely well. We should use that as an example to guide us. Unfortunately, that is not available in Bill C-15.

One very positive thing in Bill C-15 is the fact that premiums are going to be charged on the basis of risk for CDIC insurance. The negative side of that is the public is not allowed to know which institutions are being charged higher premiums because of the degree of risk. If they have a riskier loan portfolio and people's money is more at risk, unfortunately, for reasons that are not very apparent to me, the premiums are not made available to the public. Therefore the public cannot take the proper steps to protect themselves, particularly if they have an investment of over $60,000 in one of those institutions.

What Canadians really want are institutions that on the one hand are safe and provide that security and on the other hand are competitive enough to ensure that all those service fees and interest rates on charge cards are as low as they possibly can be. People want to know they are being charged the lowest possible interest rates on all the various personal loans. This is a hot issue in the country today and it is an important issue for the government to deal with.

One thing we have been talking about lately is the issue of auto leasing and insurance and whether or not the banks should be allowed to move into those areas. The answer has to be no until such time as we see some real competition in the banking industry. We have to see some competition in terms of deregulating the banks and allowing some foreign competition so that there can be

real competition to hold those banks and financial institutions accountable. This is critical.

When the government looks at this again I do encourage it to seriously consider the issue of co-insurance. It would bring some real accountability to financial institutions and hopefully, would give the public confidence in those institutions.

[The Budget, April 16th, 1996]

Madam Speaker, the hon. member spoke a lot about old age security and the need to sustain different types of benefits for seniors. That is laudable.

What does he have to say about the government spending all kinds of money in areas that actually jeopardize that kind of funding for seniors. I referred in my speech a few moments ago to a $105,000 subsidy that was sent to the Canadian Bankers Association.

The one I did not mention, and my hon. friend opposite will appreciate this, is that for some reason the Canadian Bar Association received $277,000 from the Canadian government as a subsidy.

What does my friend opposite think of those subsidies? Will he be encouraging the government to start cutting back in those areas so that we can preserve social spending for seniors?

[The Budget, April 16th, 1996]

Madam Speaker, I smell the distinct odour of Liberal arrogance across the way when the hon. member mentions polls.

I remind the hon. member to look at the recent byelections where we had his own party running scared in places where we had not even run candidates before. Let us get the record straight. That is truly the poll that really matters.

I want to touch on the issue of perks. The hon. member has touched on a bunch of trivial issues but I want to point out one thing. His pension alone would pay for all of those trips to the parliamentary dining room where four, five or six of our members may go from time to time to get a subsidized meal for a couple of dollars off. His pension would pay for any first class air fare that our members take. His pension alone would pay for any of the perks he referred to 10 times over.

I remind the member to put this into context. It is very important that Canadians understand to what lengths the government members went to protect themselves from all the cuts they were to make to everybody else well ahead of the day the budget came down. That is absolutely unbelievable but they did it and they will pay a price for it.

[The Budget, April 16th, 1996]

I see the hon. member from Winnipeg. He was out campaigning against the GST. Now he is mouthing off across the way but all those words do not eliminate the GST. It is still there.

We hear that the Liberals are working to harmonize the GST. Why are they working so hard to put another form of the GST in place? Why do they not do what we have recommended? Why do they not balance the budget and get rid of the GST? Why not eliminate it in stages? Surely, after putting up with all this fiscal restraint, Canadians deserve a reward. Why not grant them that reward in the form of a GST that ultimately disappears? That would

be a wonderful reward. People do not need that tax burden. They have paid a heavy price over the years and it is time they were given that reward.

I will talk about the government's approach to deficit reduction. The finance minister in his budget speech talked about the importance of being fair. I could not agree more. One of the fairest approaches is to make the cuts in a timely fashion. If spending reductions are made in a timely fashion that means we do not pay the price of delay. Canadians really are paying the cost of delay in spades because the government has delayed so in long making its cuts.

In the 1994-95 budget the government cut virtually nothing. It had a golden opportunity to put in place spending reductions that would have put us further ahead than we are today. During the election campaign my party campaigned on a zero in three deficit elimination plan. If that plan had been implemented when the government came to power, today we would be debating what to do with the surpluses. We would not be talking about another $24 billion deficit which is what we are facing.

Over the course of the government's mandate it is going to add $117 billion to the overall debt. That is unbelievable. The Liberals are crowing about the good job they have done. However, let us remember Canadians are paying a heavy burden.

The finance minister talked about fairness which I will also talk about. Is it fair to take $8 billion out of social programs and give it to money traders around the world? I do not think it is. In effect that is what the government has done by waiting as long as it has and by being so timid in the cuts it has made over the course of the last couple of years. It has waited that long. The interest has built up and money is going out of the country never to be seen again.

Who pays the price? The most vulnerable in society pay the price. That is why the Reform Party advocated cuts right away. We also advocated setting priorities and getting those priorities right. We said let us cut at the top. Let us cut MP pensions, for crying out loud. What did the government do? It made sure it welded them into place so members would have their pensions, while it talked about cutting benefits for everybody else. That is bizarre and ridiculous. That should not happen but that is exactly what happened under this government.

We say let us get rid of all of the perks. Let us get rid of all the extra expense around this place. Let us make some economies at the very top. If we do that then we can talk with some authority about the cuts that need to be made throughout government. Unfortunately, they do have to be made throughout government.

In anticipation of questions from hon. members across the way, they are going to make reference to the approach of the Reform Party. We presented a very extensive budget preceding last year's budget which laid out all kinds of initiatives for the government to follow. What did the government members do? They sat there and mocked us. They have said they want to see it again this year. Well we have laid it out for them. The approach is there.

For instance in the area of health care we would have cut about $800 million. What did the government say? It said that was too deep, that we should not cut that deeply. What did the government do? It cut $3.2 billion in health care. It closed more hospital beds across this country than any provincial government, probably more than all of them combined. I think it is time Canadians knew about that.

We would have cut $200 million out of higher education. What did the government do? It cut $1.2 billion out of higher education. That is the cost of delay. What did the government do when we said we would cut $200 million? It said we were slash and burn. The government is cutting $1.2 billion which is unbelievable. Again, this is the cost of delay.

The deficit is not all due to the cost of delay. The Liberals also decided they were going to continue to fund their friends in big business which is why we have all kinds of money going to all kinds of unbelievable places in Canada today. Why do the Sears department stores have to get money from the federal government? Why does Eaton's need to get money from the federal government? Why does American Express get $17,000 from the Canadian government?

There is also $121,000 going to Abitibi-Price. Mark's Work Wearhouse gets $99,000, the Hudson's Bay Company gets $5,000; on and on it goes.

Here is an interesting case which I would like my friend across the way to justify. Why are we sending $105,000 to the Canadian Bankers Association? Banks earned $5 billion in profits last year and the Canadian government is giving the bankers association $105,000. That is unbelievable. It says here that the grant was from the Department of Human Resources Development for training, which is unbelievable.

Members across the way should be ashamed. They should stand in their places and chastise their government. I hope they have the intestinal fortitude to stand at the budget vote tonight, as the hon. member for York South-Weston says he will do, and vote against the government for that kind of hypocritical spending. It is absolutely ridiculous.

I encourage Canadians who are watching the debate to take everything the government has said with respect to the progress it has made with a grain of salt. I ask them to look at where it is cutting.

This is not the beginning of the end of the deficit problem in the country, it is the end of the beginning. The government has barely scratched the surface. Let us hope that it sets its priorities in a way that is mindful of the needs of ordinary Canadians.

[The Budget, April 16th, 1996]

Madam Speaker, I will be splitting my time with the hon. member for Elk Island.

It is a pleasure to address the House on the budget once again. I will start by putting things in context. Many speakers have stood up today and pointed to the size of the debt. It is critical that we put this whole debate back in context.

We have huge debt in this country. It is unparalleled in the world for the size of the country. Our debt today stands at $578 billion. We are paying somewhere in the range of $47 billion a year in interest payments on that debt which will rise to almost $50 billion before the end of the government's mandate. The issue is important considering the context.

The GST was not in the budget but the Liberals have frequently promised to discuss it, even as late as last summer. During the election campaign hon. members across the way campaigned door to door saying that the GST would be history if the Liberals were elected. I do not have to tell Canadians that is not the case today. The GST is still with us despite what the Deputy Prime Minister said on national television 10 days before the last election. She said: "I will resign if the GST is not abolished."

The Prime Minister and the finance minister said similar things. They said that it would be gone, that it would be scrapped. "I hate it. I will kill it." Those are the sorts of things that they said during the election campaign.

[The Budget, April 16th, 1996]

Mr. Speaker, I listened with interest to the speech of the hon. member.

The member commented about the Reform Party cutting too deeply into areas of social programs. I am curious to know why the hon. member did not mention that while we advocated cuts of about $800 million to health care, his party is carrying out cuts of $3.2 billion in health care. His party is closing hospitals across the country. While we advocated cuts of about $200 million to higher education, his party is advocating and carrying out cuts of $1.2 billion in higher education. How can the member turn around and say that the Reform Party is being radical?

Finally I want to point out that while his government is in power the interest payments will rise. In other words the transfers to foreign lenders and foreign banks will rise from $40 billion to $50 billion. That is absolutely ridiculous. That is slash and burn. I want the member to answer those questions.

[Petitions, April 16th, 1996]

Mr. Speaker, I rise pursuant to Standing Order 36 to present a petition on behalf of the people of the Medicine Hat constituency.

The petitioners call on Parliament to preserve Canadian unity, parliamentary tradition and protect the rights of all the people of Canada by prevailing upon the Speaker of the House of Commons to recognize the Reform Party of Canada as the official opposition during the remainder of this Parliament.

[Goods And Services Tax, April 15th, 1996]

Mr. Speaker, it is déjà vu all over again. Seventy-nine years ago the government at the time promised that income tax would be a temporary measure, and we are still paying for that broken promise.

In 1993 the Liberals promised that under them the GST would become a temporary measure. Canadians are waiting for them to fulfil their promise.

Now the Liberals have turned around and instead of getting rid of the GST they want to integrate it. They want to make it something that Canadians are stuck with forever.

My question to the Deputy Prime Minister, who has made all kinds of pronouncements on this issue, is why are they breaking their promise? Why are they not getting rid of the GST as they said they would?

[Points Of Order, March 28th, 1996]

Mr. Speaker, on a point of order, I would like to bring this whole issue to an end, if we could.

I would like to, if I could for a moment, quote from documents that I believe to be true that will give the Chair some understanding of why I used the statements I used when question period was under way. If I might do that, perhaps it will then bring some understanding to members across the way who object to the language that I used.

[Privilege, March 28th, 1996]

Mr. Speaker, this is not a question of privilege. I would like to point out also that there were many promises made on the GST. On behalf of the Canadian people I would like to raise that as a question of privilege.