Lorne Nystrom

[Budgetary Surplus, September 20th, 2000]

Mr. Speaker, my question is for the Minister of Finance.

The Minister of Finance put all the surplus into paying down the national debt, but he had a choice. He chose the bondholders of Bay Street before paying down the human deficit in this country. He chose the bondholders of Bay Street before putting more money into health and education. He chose Bay Street before helping the farmers and helping poor people in this country.

I want to know why the Minister of Finance chose his friends on Bay Street instead of paying down the human deficit by putting money into programs for people in this country.

[Canadian Alliance, September 19th, 2000]

Mr. Speaker, welcome to the Bay Street golden trough Olympics where Liberal, Tory and Alliance parties fiercely compete for corporate gold.

Bay Street dinners have seen Tories charge $500 a plate, the Liberals $1,000 and the Alliance's Tom Long $5,000 a person for a picnic in the Muskokas. However this year's winner of the golden trough award is the so-called grassroots Canadian Alliance for organizing a $25,000 a table corporate fundraiser in Toronto.

Twenty-five thousand dollars is the yearly income of an average working family in my riding. Twenty-five thousand dollars is more than two years salary for a person working at minimum wage in the province of Alberta.

This is the Alliance's price for democracy. This is its price for access to its corporate agenda. This is a party where Bay Street is now paying the piper and a party where Bay Street will call the tune.

[Financial Consumer Agency Of Canada Act, September 18th, 2000]

Mr. Speaker, it is rather puzzling to see no one from the official opposition getting involved in this debate except for that last very short question, which was really a question on a different topic. I wonder if this has something to do with the big dinner coming up in Toronto where the Canadian Alliance is selling tables for $25,000 to very wealthy people. This shows that it is a party that has moved a long way from ordinary citizens and a long way from the grassroots. I wonder if this has had some impact on members of parliament as to whether or not they were willing to get up and debate the issues respecting banks because some of the people buying these tables will surely be bankers. They will not be ordinary people living on the east side of Calgary or at the north end of Regina. It will be wealthy people on Bay Street and a lot of banking people.

I also noticed that the profits of some of our big banks have been escalating in the last few years. If we go back to 1992, for example, the profit of the big six banks was $1.8 billion, in 1994 it was $4.3 billion, in 1997 it was $7.6 billion and in 1999 it was $9.2 billion. With that kind of money I am sure some of these people will be buying tables at $25,000 a pop.

Then we have questions about big tax cuts for wealthy people and millionaires. Today somebody in the House said that the 17% flat tax promised by the Alliance Party would give someone making a million dollars a year a tax cut of $130,000 a year.

This is quite a metamorphosis for a party that started off as a grassroots party. It is now a party of Bay Street, a party of big business and a party of the wealthy and the privileged. I wonder if that is why its members are not participating in this debate.

[Financial Consumer Agency Of Canada Act, September 18th, 2000]

Mr. Speaker, one of my real concerns about the bill before the House today is the change in the wide ownership rule. The government is now proposing we go from 10% of the shares being held by any one individual to 20% for voting shares and 30% for non-voting shares.

We have already sold out or given up so much of our country, it seems to me that if we change the wide ownership rule we will be inviting more concentration on the banking industry and more foreign ownership of the banking industry. In essence, a couple of billionaires could control a big national bank.

I talked to some people in my home city of Regina over the last couple of days who were also concerned about losing one of these last industries that really control the country.

So much has changed with the free trade agreement. This is one of the few that is still left. The other concern I have is that the government is now proposing to treat medium sized banks and large banks differently. For large banks a foreigner, a wealthy individual or an institution could buy up to 20% of the shares. For a medium sized bank, a bank with between $1 billion and $5 billion in equity, a single person could purchase 65% of the shares. In other words, the Banque Nationale in Quebec could be purchased by the Chase Manhattan or by anybody else and suddenly that bank would be out of the province of Quebec and out of the country. With its headquarters gone jobs would be gone. We would lose a very important part of our country.

I want to ask my friend from Nova Scotia whether he shares these points of view. They are really two different questions in terms of the threshold rising and in terms of treating the three medium sized banks differently. It is not just the Banque Nationale, it is also the Laurentian Bank and the Bank of Western Canada.

For smaller banks, banks with an equity of less than $1 billion, there are no rules or restrictions at all. They can be owned by anyone, a foreigner or a Canadian. There is a difference there as well.

Those are the concerns I have in terms of the wide ownership rule and losing something that we have as Canadians, something that we have regulated and made work to a pretty decent degree over the years. I am concerned that with the lack of debate going on in the House it will be be hard to mobilize public opinion to put pressure on the government.

Liberal members are not even participating in this debate. The minister spoke for about 12 minutes and that was it. The official opposition spoke for a few minutes by putting up one speaker and that was it. They are not even rising on questions and comments when we are debating a very important issue.

This is a bill that is over 900 pages in length, a bill that affects many other pieces of legislation. This is not just 900 pages, but the consequential changes in other legislation amounts to another 4,000 pages of legislation as well. Much of this will be done by order in council, by memorandums of understanding and by guidelines. The minister will have tremendous power in terms of being a banking czar.

Those are the concerns that a lot of us have. I hope we can engage some of the members across the way in this debate. It is a very important issue. They talked a lot during the bank merger campaign in 1998-99 about changing the rules and putting more power back into parliament and giving less power to the bureaucrats and the minister and here is their chance to do that. Let us have some real engagement in this debate.

[Financial Consumer Agency Of Canada Act, September 18th, 2000]

Madam Speaker, I am glad the member of the Conservative Party is willing to take a look it. The concern in that regard would be a takeover of the National Bank or the Laurentian Bank. Then we would have the headquarters moving out of Montreal, out of the province of Quebec and indeed out of Canada, if it were bought by a foreign entity. It seems to me the same rules should apply to mid-size banks as apply to larger banks.

Would the member be in agreement that it is kind of puzzling the National Bank, which is quite large and not that much smaller than the smallest of the big five or six, should come under different rules, particularly when we look at the politics of the national union, and be treated differently because of where its headquarters are located than those in the rest of the country?

[Financial Consumer Agency Of Canada Act, September 18th, 2000]

Madam Speaker, would my friend in the Conservative Party agree with me that there should not be a change in the wide ownership rule?

For many years we had regulations brought in by the Pearson Liberals which stated that a person could own no more than 10% of the shares of any bank. That was done to protect the Canadian banking industry, to keep it Canadian. At one time there was a rule that said no more than 25% of the shares could be owned by foreigners. That rule went by the wayside during free trade.

That will be changed. It will be moved from 10% to 20% of voting shares and 10% to 30% of non-voting shares for big banks with equity of more than $5 billion a year.

Medium size banks are defined as banks with between $1 billion and $5 billion in equities per year. There is concern in the province of Quebec that the National Bank will come under different rules. In terms of medium size banks the rules indicate that only 35% is to be widely held. In other words, somebody could buy 65% of the Banque Nationale. The member mentioned ING Direct, Citibank or Chase Manhattan which could go in there and buy the Banque Nationale, the Laurentian Bank or the Bank of Western Canada.

Would he agree that the same rules should apply to medium size banks in terms of being widely held as applied to the large banks? Does he also agree that going to 20% opens the door to more foreign control influence in our banking system, something that now is truly Canadian?

The Alliance is not participating in this debate so I ask the more progressive of the two conservative parties in the House to respond to that.

[Financial Consumer Agency Of Canada Act, September 18th, 2000]

Mr. Speaker, I do not think I will be going to that dinner. I wonder whether you will be going but I understand you cannot answer a question in the House so I will put one to my friend from Cape Breton instead.

It strikes me as very strange that the new Alliance Party, which is the old Reform Party, which was the old Social Credit Party at one time was very much in opposition to what the banks did to ordinary citizens. I remember the member for Souris—Moose Mountain for example railing against the banks and their insensitivity to rural communities in small-town Saskatchewan and the like.

I am wondering if the hon. member would conclude with me that perhaps with this big dinner in Toronto that is coming up for $25,000 a plate, and some of those folks would probably be bankers from the different banks, that it has probably caused the Reform Party, now the Alliance Party, to be a bit muted in its once traditional criticism of the banks. I can remember that used to be one of its favourite themes over the years. When my friend from Souris—Moose Mountain was a Social Creditor many years ago, he used to campaign among his neighbours about the powers of the banks being too big and too massive. That of course is the case for many of those people who all of a sudden have had a change of heart.

There is now a $25,000 a plate dinner which of course is not for ordinary people, which means the party has lost touch with the grassroots ordinary people. Does the hon. member think that might be the reason for the change of heart?

[Financial Consumer Agency Of Canada Act, September 18th, 2000]

Mr. Speaker, rest assured there will be an amendment for a community reinvestment act. There is no reason why we could not do what a number of American states are doing and require a bank to invest a certain amount of their portfolio in the region or the state or the area from where they get their funds from the ordinary people, which would lead to economic development in the particular area. It is called the community reinvestment act.

I do not know why it has not been done before. Maybe it is because the banks are big contributors to the Liberal Party. They are putting a lot of money into its campaign fund. I also notice that it is not just the Liberal Party any more. I noticed that the new leader of the Alliance, that Fred Flintstone on rollerblades, is having a fundraiser in Toronto very soon. They are charging $25,000 a table. Those tables will be bought by wealthy bankers, wealthy business executives and CEOs. That shows that the Reform Party, now the Alliance, has lost touch with its grassroots.

It is for those reasons that we do not have a community reinvestment act. The bankers contribute to the funds of the Liberal Party, and now the Alliance Party. They try to govern in the interests of the big bankers and the wealthy in this country. Imagine that, $25,000 a table. I can hardly believe what I read this morning in the Globe and Mail .

[Financial Consumer Agency Of Canada Act, September 18th, 2000]

Madam Speaker, I am sorry, I missed the last comment of the member for Ottawa Centre.

[Financial Consumer Agency Of Canada Act, September 18th, 2000]

It may be a good idea, but I have some questions about the rules pertaining to each of these three. A large bank is any bank with equity over $5 billion. That includes the big five Bank of Montreal, Royal Bank, TD Bank, Scotiabank and CIBC.

Then there is a mid-size bank with equity between $1 billion and $5 billion. My friend from the Bloc Quebecois was referring to this. That includes la Banque Nationale which is a fairly large bank based in the province of Quebec, the Banque Laurentienne and the Bank of Western Canada. The wide ownership rule does not apply to them. For them, only 35% of the equity or voting shares have to be widely held. In other words, an individual could purchase 65% of the shares of la Banque Nationale, the Banque Laurentienne or the Bank of Western Canada. That is a real concern in the province of Quebec and elsewhere. Why would we have different rules apply to these banks which are a bit smaller than those which apply to the Royal Bank, CIBC and Bank of Montreal?

The Chase Manhattan Bank or Citibank of New York could buy la Banque Nationale just like that. The headquarters would go out of Quebec and Canada and we would lose an important part of our banking industry. Why has the minister decided to have different rules and regulations for mid-size banks compared with big banks? Why can the minister himself change the rules? Why is parliament not supreme in changing those kinds of rules?

There is also a third category of bank called the small banks. They are banks with equity of under $1 billion. There are no restrictions at all on the ownership of small banks. The hon. member for Kamloops, Thompson and Highland Valleys could start a bank. It could go up to $1 billion with no restriction on ownership. He could give it away as a gift to one of his friends in Finland or wherever he wants. There are no rules or restrictions at all. We could have the bank of Tim Hortons across the country. There could be the bank of Safeway or Loblaws. The bank of Tim Hortons could be the biggest bank if it keeps on going the way it is.

There are no rules or regulations. It is totally unrestricted with regard to ownership. We are asking why there is this great change and this great difference between small, medium and large banks. This is of particular interest in the province of Quebec with la Banque Nationale.

Outside the wide ownership rule a second concern I have with the legislation as written is that far too much power is being given to the Minister of Finance. I see the parliamentary secretary across the way shaking his head. We have seen a disturbing trend for the last 20 or 30 years. More and more power is taken from the Parliament of Canada which represents the people of the country and put in the hands of the Minister of Finance, other ministers and in effect in many cases in the hands of senior bureaucrats. The parliamentary secretary can confirm that the Minister of Finance can change some of these ownership rules with the stroke of a pen without going back to parliament.

In effect the minister has become a banking czar who can determine many things such as whether or not, for example, a merger will go ahead. In the legislation there is now a process for mergers, but it is only a process for mergers.

It is the minister himself or herself, whoever that minister may be, who will make a decision about mergers in the future, whether it is a good merger or a bad merger, according to the process that is set in place. Why should that not be parliament? Why should it not be the finance committee that recommends to parliament whether or not a merger is good or bad for the people of this country? Why not democratize this institution and make meaningful the role of a member of parliament elected by the people? Yet, this power is concentrated in the hands of the Minister of Finance concerning mergers, acquisitions, ownership rules and many other things. In this bill of 900 pages, the power is with the new banking czar, the Minister of Finance.

Some Liberals across the way say that we have a very competent Minister of Finance. Even if we concede that, and that is very questionable because no human being should have that power, he will not be the Minister of Finance for much longer. There will soon be somebody else.

Do we want to give this kind of power to the member for Wild Rose, for example, if he becomes Minister of Finance, or to the member for Brandon—Souris if he becomes the Minister of Finance? That is what is written in the legislation. This bill is saying to hand power over to the Minister of Finance to make important decisions over mergers, acquisitions, ownership rules, regulations and so on.

Even when it comes to the banking ombudsman, the guidelines are not written. There have been memoranda of understanding. There will be all kinds of rules and regulations that are still being debated and decided by the Minister of Finance and sometimes not even recommended by the cabinet of this country.

We are going in the wrong direction in terms of the lack of power in the House of Commons and about authority being taken out of the House of Commons and transferred to the Minister of Finance and transferred to bureaucrats, however competent they may be. That power should be here in the House because we are responsible to the people and we are accountable every three, four or five years to the people in our ridings. That is where the power should reside.

I mentioned the consumer agencies. I think that in principle many of these agencies are going in the right direction. I do not think they have enough power or legislative clout to adequately protect consumers. Many of the rules and regulations are still being decided in terms of guidelines and the memorandum of understanding.

I referred already to mergers to a certain extent. We have in the bill the guidelines and the process as to what must happen when a merger occurs. These guidelines are common sense guidelines in terms of a public debate. We need a process where the details are revealed as to why the parties want to merge and the like. It is the Minister of Finance who has the power. It would be similar to what happened in 1998-99 when the TD and the CIBC wanted to merge and when the Royal Bank and the Bank of Montreal wanted to merge. It was the Minister of Finance after pressure from the public, instigated primarily by our party and our friends on the progressive side of the Canadian population, who started to make this an issue across the country.

In my last minute, there is nothing here to establish a community reinvestment act. There is nothing here that will prevent bank branch closures except the notice in the cities of four months or a notice in the rural areas of six months, but there is no empowerment of the community that would prevent a closure if that bank branch were profitable, so again it is a Mickey Mouse approach.

The final point is that there is nothing here in terms of taxes on banks. We all heard the news a while back where the Minister of Finance, because of current changes in the tax system based on 1999 profit levels, was giving the banks an extra tax cut of $500 million a year. These are the most profitable companies in the country and yet they are getting big tax cuts.