Lorne Nystrom

[Air India, June 5th, 2003]

Mr. Speaker, my question is for the Solicitor General.

Ujjal Dosanjh, the former premier of British Columbia, said yesterday that CSIS treated the Air India crisis in a casual manner because it involved people from the south Asian community.

In light of this concern by a respected leader of the south Asian community, has the minister now reconsidered his decision not to hold a public inquiry into the Air India disaster at the conclusion of the current criminal trial?

[Committees of the House, June 5th, 2003]

Mr. Speaker, I have two points.

First, the member of the Alliance Party said I was doing this for some other reason. That is impugning motives which is against the rules of the House. My motives are to have to a full-fledged debate on the possibility of bank mergers in this country. I hope he would withdraw the allegation that he made.

Second, Mr. Speaker, I hope you follow the advice of the hon. member for Calgary Centre and check the blues. My understanding was that I was getting unlimited time, that the House thought this was a very important debate. It had nothing to do with the debate on Bill C-7 or whatever other issue the member from British Columbia was thinking of.

[Committees of the House, June 5th, 2003]

Mr. Speaker, the comments made by the member from British Columbia are very relevant. I know from his comments in committee and our private conversations that he is concerned that sometimes our party is a little too negative in terms of big banks and big business in Canada. However he knows very well, being a western Canadian, the record of western Canadian social democrats in terms of the business community.

We just saw two days ago, for example, the re-election of the Gary Doer government in Manitoba. It was extremely popular because it had a reasonable position, not just with workers, farmers, senior citizens and health care and so on, but a reasonable position in dealing with the business community. That certainly has been the legacy of the NDP government in Saskatchewan, going back to 1944 with Tommy Douglas, on through Roy Romanow, and now to Lorne Calvert. I think we have been positive and helpful in terms of big bank mergers.

We can go back to the real test in 1998-99. I was really puzzled by the deafening silence of the Reform Party in those days regarding its concern about big bank mergers. We were positive in terms of our approach. We suggested these were not good things for the small business community in terms of access to capital and we were proven right.

We were also proven right that the mergers proposed at that time would not be a good thing in terms of service to individual communities right across the country. I talked to many citizens around the country. Public opinion polls that were taken bore us right, that bank mergers were not in the best interests of Canada. That is why this study took place.

I do not think we are being negative. There is a party that is quite negative in the House of Commons, the Alliance Party, which complains about almost everything that happens in this country; that Canada is falling apart and that this country is going to hell in a handbasket. I criticized the Liberal government, but we are still a pretty decent country here. The opposition should be more positive in what we propose, so that is what I am doing today.

I am proposing that we concur in this report of the finance committee. Mr. Speaker, I know you are anxious to say a few words yourself, but we should concur in this report and take a look at the minority report which we have tabled as an appendix to this and chart a course that is important. We have seen the dollar go down, the dollar go up--

[Committees of the House, June 5th, 2003]

Mr. Speaker, I agree with the hon. member for Saint-Hyacinthe—Bagot. He has referred to the importance of a written guarantee from the Canadian banks. That would be a good idea. I am pleased that the Bloc Quebecois did this some years ago.

He has spoken of three things, jobs being one of them. It is important for Canadians to have jobs, and it is important that they have a guarantee of jobs. If two or three major banks in Canada merge, it is virtually certain that some people will be laid off. I have often seen this happen in Canada when major companies, regardless of sector, are merged.

We must not lose sight of the fact that the big banks hold a very special position in Canada. In fact, they hold charters from the Parliament of Canada which involve certain obligations to the public. This makes the major banks very special indeed, and is why we should follow the very wise advice of the hon. member for Saint-Hyacinthe—Bagot about having a guarantee in writing from the Canadian banks before the merger.

Another important point concerns services. I have often spoken of the services offered by the major Canadian banks. I come from a little place in Saskatchewan called Wynyard. It has a population of only 2,500. Now we have the good fortune to have two or three banks, one of these a credit union, the equivalent of the Caisse populaire in Quebec. There are choices and I want a guarantee that those choices will remain in future.

There are five major banks in Canada at present. These are: CIBC, Royal Bank, Bank of Montreal, Bank of Nova Scotia, and National Bank. The latter started out in Quebec, but we have a major branch in Regina.

If there were a proposal to merge the big Canadian banks, it would be essential to have a guarantee of services in all regions of Canada. We have had a lot to say about the importance for the first nations, the aboriginal groups of our country, to have access to capital. It is also very important to that segment of our population.

The third point is interest rates. At the present time there is a big difference between interest rates in Canada and those in the United States. It is good for Canadian banks to have a higher interest rate than the Americans, because they will make large profits. At the present time, and historically, the difference between our two countries is very great.

I agree with the hon. member for Saint-Hyacinthe—Bagot. It is a good thing to have promises, commitments in writing, from financial institutions.

[Committees of the House, June 5th, 2003]

Mr. Speaker, on a point of order. I wonder if I could have unanimous consent to extend my time for a few minutes?

[Committees of the House, June 5th, 2003]

Mr. Speaker, access is a very important question. As we study bank mergers across the country we often find that where bank branches have been closed it has often been in some of the poorer areas of the country, like inner cities. I think there are even fewer bank branches in the inner city of Regina and in Winnipeg. There are probably fewer bank branches in the inner city of Winnipeg than there are in the suburbs in terms of access for the people.

Because fewer people have cars in the inner cities they rely on public transportation or on walking to get to a bank. The question of access then becomes very important.

The other part of course is rural Canada. Often banks will close branches in rural Canada. This is where the credit union will often come in. A while ago in Saskatchewan and Manitoba a number of the branches of the Bank of Montreal were closed. However, to the credit of the Bank of Montreal, it negotiated an arrangement with the credit union where it took over a former Bank of Montreal branch and continued to provide service to people in the communities.

The other thing is that when a bank branch closes there is often less competition. The town may have had two banks but it is now down to one. This puts less pressure on the lending officers to lend money for a mortgage, for a small business loan or a personal loan, or provide the basic services to ordinary Canadians.

Those are the reasons that it is important for the finance committee of the House of Commons to maintain its role and to study whether bank mergers should proceed.

My prediction is that after the election of the member for LaSalle—Émard as the leader of the Liberal Party and the Prime Minister of the country, if he survives the next election campaign, once again mergers will be proposed and he will try to give the flashing green light to those mergers. I need these checks and balances on behalf of the ordinary people of Canada.

I see that the hon. member for Saint-Hyacinthe—Bagot wants to ask a question. I am going to stop here so that he can ask it.

[Committees of the House, June 5th, 2003]

Mr. Speaker, there are many very important issues in considering mergers of the big Canadian banks. Is a merger of the big Canadian bank important to Canadians across the country? Is a merger good for the farmer from Saskatchewan? Will this merger be good for small businesses or the average citizen in Quebec? Will it be good for first nations people living on a reserve in Manitoba where there is a high poverty rate? Will a merger proposed by the big banks be good for all Canadians? This is a very important question.

There is another important question. Will the merger be good for small businesses? I know full well that there are many small businesses in our country that have a problem with the big Canadian banks. This is another important issue to address.

I am also thinking about services across Canada. I come from a riding that is half rural and half urban. There are many small towns and villages in my riding. Sometimes small towns and villages do not get good services.

I remember—I talked about this 15 minutes ago—a trip I took with the member for Churchill to Lynn Lake, Manitoba. The people there have lost their only bank. Lynn Lake is approximately 75 to 100 kilometres from the next town in Manitoba. That is a long distance for many people in Lynn Lake. I am thinking about seniors who have to take the bus. These are very important issues.

The role of a backbencher is to ask these types of questions. That is why the Standing Committee on Finance is very important. I was surprised by the Senate of Canada's recommendation. It is not up to the Senate to determine whether a bank merger is good or bad for the Canadian economy.

[Committees of the House, June 5th, 2003]

Mr. Speaker, the question was about whether or not our banks are competitive internationally. Once again I would refer to Dr. Peters who was the former minister of financial institutions. I think his comments were that our banks are very competitive internationally.

If we look at all the evidence that has come before the committee, we will see that our banks do not have any problem when it comes to competition internationally. Our banks are large nationally and are still a good size internationally. There is no reason that they cannot form a joint venture, a consortium for international competition that would put them up there in the size of the larger banks around the world. I do not think many contracts have been lost because they are not big enough to finance them.

The member mentioned the takeover of MacMillan Bloedel by Weyerhaeuser. There have been many other big mergers in the country and Canadian banks are capable of doing that. Sometimes one bank by itself does not finance a larger financial project, but sometimes two or three banks will go together to help finance a large project in this country. I do not think there is any real problem with that.

I am not concerned at this stage about international competition because our banks instead can form a joint venture, a national consortium, and therefore be big and very competitive.

The question we have to answer is whether or not a bank merger is good for a small community in the Annapolis Valley in Nova Scotia. Is a bank merger good for a small community in central Ontario? Is a bank merger good for a small community such as Wynyard in my riding in Saskatchewan? Those are the questions we have to answer as parliamentarians. The last time around we said no very decisively. In the end the former minister of finance, the member for LaSalle—Émard, also said no.

[Committees of the House, June 5th, 2003]

We have concern about banks making a profit. If we look over the spreadsheets of banks, banks do extremely well.

It is interesting that a lot more of their profit now is coming from bank service charges than in the past. It is important that we have the access to services at a reasonable price. I think of many communities that have this problem.

I think of the branches that have closed. Branches tend to close in rural communities and the inner city. They tend to be in places where people have to drive a lot further to get services after a bank closes.

I think of my own riding, for example, where bank branches have closed. The credit union has taken over these bank branches now and provides those services. These are factors that should be considered. I am talking about access to banking in all regions.

I am talking about banks and I happen to see one of my favourite bankers walk in, a former vice-president of Yorkton Securities who is an MP from Nova Scotia. I know he too is concerned about the access to banking in all regions of this country.

What about access to banking? If someone is living in a small town or village and their branch closes, all they have if they are lucky, is an ATM machine in the corner cafe or grocery store. These are issues we should be talking about. Yet a Senate committee report said that the House of Commons should not have a role in terms of commenting on bank mergers in Canada.

One of the things that has been talked about is the size of Canadian banks in terms of the international community. Will our banks be internationally competitive? In general our banks have done very well internationally. One example is Scotiabank whose chair, Mr. Peter Godsoe, back in 1998-99 was one of the leaders in the argument against the mergers of the other banks. His bank has done very well in the United States and other parts of the world.

It is important that we keep our banks competitive internationally, but we do not have to have the merger of our banks domestically to make sure they are more competitive internationally. As Mr. Peters, a former member of Parliament for the Liberal Party said, there is nothing that says our banks cannot form a joint venture internationally or form a consortium of Canadian banks internationally to be bigger and to compete with Chase Manhattan, ING Direct, or the City Bank in New York.

Those are things that our Canadian banks could do to compete internationally. We have very competitive banks internationally. It also provides great opportunities for Canadians in terms of jobs and other opportunities.

I want to mention a word here about the role of the Competition Bureau and the Office of the Superintendent of Financial Institutions. Both of these institutions have a very important role to play. When a bank merger is proposed in Canada, which happened in 1998, it has to go through a process at the House of Commons finance committee. It has to go through the process at the Competition Bureau, the Office of the Superintendent of Financial Institutions and then of course have approval by the Minister of Finance.

It is still very important to make sure that the Competition Bureau has a thorough review of whether or not it will be good for the Canadian people in terms of competition.

The Office of the Superintendent of Financial Institutions must continue to have a thorough review in terms of whether or not it is a reasonable proposition for the Canadian people. In addition, the Parliament of Canada, the finance committee, has a very important role. The role of a parliamentary committee is crucial.

We have just gone through a debate on a point of order about whether or not there was adequate opportunity for members of the House to present amendments at the Indian and northern affairs committee. I want to have the same full-blown opportunity for the finance committee to study very thoroughly any proposed merger.

We need serious parliamentary reform where parliamentary committees have much more independence. It is ironic that we can choose the Speaker of the House freely, independently and secretly in a ballot, but we cannot have the free choice secretly of a committee chair. We need those kinds of rule changes where we have more independence on our committees, where a committee can timetable legislation or can introduce legislation to the House of Commons and where there is less interference from the government, from the cabinet and from the Privy Council Office. That is the kind of reform needed in terms of our parliamentary system.

If we had those reforms or a greater independence of committees, a greater research capacity for a committee in the House a Commons, then the committees could play a very lead role in terms of studying a proposed bank merger. It should be the parliamentary committee that looks at a number of issues to determine whether or not a proposed merger is in the public interest, because we are all elected to represent our constituents.

Going back to the member for Churchill, she was raising questions in the House about Lynn Lake when it lost its bank. That is the role of a member of Parliament. We need a parliamentary committee with greater independence that would sever the direct link from the government, from the Privy Council Office.

I fail to understand why the Liberal government is being so conservative, so reactionary, so cautious. Such a party is status quo when it comes to parliamentary reform.

I was pleased to note yesterday in the inaugural speech of the new premier of Quebec, Jean Charest, that he has proposed a system of partial proportional representation in the province of Quebec. That is a really serious electoral change in terms of electoral reform.

Along with that electoral change which I predict will happen in British Columbia and Prince Edward Island, hopefully Ontario and soon right across the country, that electoral change will eventually happen here. Along with that electoral change we have to reform Parliament. Parliament has to change and reform as well to make this institution more meaningful for the Canadian people.

Canadians spend tens of millions of dollars a year on this institution. They want an institution with committees that represent the public interest. One area representing the public interest is deciding whether or not the huge financial institutions that are involved in everyone's life, the banks, have a right to merge. It is extremely important that we do that.

I read in Quorum today about a parallel Liberal caucus. The minister across the way from Montreal, the minister of immigration, apparently was at the parallel Liberal caucus last Tuesday night at a restaurant in Ottawa's Chinatown. Apparently there were more members at that caucus than there were at the so-called official Liberal caucus that meets here on Wednesday mornings.

It is absolutely incredible how irrelevant Liberal members of Parliament see their own caucus. In Quorum there are quotes from Liberal members of Parliament which say that it is a waste of time to go to their national caucus. What an admission for government members to say that it is a waste of time to go to their own caucus. They are spending the taxpayers' money, blowing the taxpayers' money. It is amazing that they would not want to be in favour of parliamentary reform. One area of parliamentary reform is the study of important public policy issues such as whether or not banks in this country should be merged.

There is a role for parliamentary reform in this country. There is a role for the finance committee in determining whether or not bank mergers should go ahead.

I made a reference a few minutes ago to Dr. Doug Peters, a former Liberal member of Parliament who is the vice-president of a bank. He sat in the Liberal cabinet in 1993 and 1997. As I said, he was a former chief economist and the vice-president of a bank. The bank happened to be the Toronto-Dominion Bank.

I know that Dr. Peters is very frustrated with some of the economic policies of the government across the way. When he appeared before the finance committee, he raised a number of questions which I think the finance committee should consider when it comes to the merger of big banks.

Among those questions were whether or not the merger of banks would lower the cost of banking services to individual Canadians. One, if banks merged, would it lower banking service costs for individual Canadians? Is the answer yes or no? The answer was no according to Dr. Peters. Two, would the merger of banks improve the level and quality of service that Canadians receive from banks? The answer again was no. Three, with the merger of banks in this country would it increase the choices of the Canadian people for banking services? If there are fewer banks does it increase choices? It is a very important question. The answer again was no.

These are Dr. Peters' questions, the former minister of financial institutions in the Liberal government across the way, a former Liberal member of Parliament.

Four, he asked whether or not it would improve the availability of credit and lower the costs of credit for small and medium size businesses in Canada. Again, the answer was no. Five, would the merger of banks lower the cost of credit to Canada's large business community? The answer was no.

I have two more questions by Dr. Peters who is a very distinguished Liberal, a former member of cabinet, a privy councillor. Six, would it increase the profitability of Canadian banks for international operations? Again, the answer was no. Finally, would it improve the Canadian economy by increasing employment and economic growth? Again the answer was no.

Mr. Speaker, if I have run out of time, I would like to ask for unanimous consent to continue for another hour or two.

[Committees of the House, June 5th, 2003]

Mr. Speaker, I may have to go back a long way before I can find a member of Parliament has had the House of Commons put on record that someone is not one of his good friends.

I know Mr. Orchard ran against the member for Prince Albert the last time around and perhaps that is why he is referring to it. That is very strange. He runs the risk of losing Mr. Orchard's vote the next time around if he happens to move into the new riding of Prince Albert.

I mentioned the importance of access to capital. I am surprised to hear a so-called free enterprise party such as the Alliance not being concerned about the big banks and how they sometimes pull back on providing capital to small business. I have seen many cases over the years where banks have withdrawn from the market of providing adequate small business equity financing to small businesses.

One thing that has happened many times is the credit union movement has moved into that void and provided capital for small businesses. That is another concern I have. That is why we should have a full fledged debate in this country about capital.

The other thing I have noticed about small business capital is that there are more and more first nations people who are interested in small and medium sized businesses. I think of my province of Saskatchewan and some of the small business activity by first nations people. They need access to capital as well. I think this really ties into the debate on Bill C-7, where first nations people really want to run their own affairs. They want respect to determine what kinds of institutions they want to govern themselves. They want to ensure that more of their people get training and skills and get professions where they can develop their own communities and people. They want to give their own people jobs that are well paid. They want their people to be entrepreneurs, professionals, teachers and social workers.

One way of doing that is to ensure we have more capital from banks for first nations people, for community development, for their own cooperatives and small businesses. I think for example of the First Nations Bank of Canada that is based in Saskatoon and some of the work it is doing.

An area we have to look at when we talk about bank mergers is the access to capital, if there is a big merger among two or three big banks for small business, for first nations and for farmers across Canada? These are some of the very important things about which we should talk.

I was reminded of this just a minute ago when the member for Churchill talked about access to reasonably priced services by banks. She mentioned that these services should be reasonably priced. She was talking about going to an ABM machine and hearing people complaining about the high prices. We see this now in bank service charges.

I do not have my files with me today. If the House wished to extend the time I am allowed to speak, I could go on for a couple of hours and tell members about the horror stories I have heard about ordinary citizens who have been charged time and time again by banks for service charges. These are ordinary citizens who cannot afford this kind of hidden taxation.

There should be a certain number of transactions that any citizen can have, be it 20 or 30 or how many per month, without charge. Then low income people and people with modest incomes would not be penalized when they have to use a bank a couple of times a week.