Lorne Nystrom

[Competition Act, March 16th, 1998]

Mr. Speaker, I think the revenue critic for the Reform Party would have a point of order when he is being accused of talking out of both sides of his mouth.

[Competition Act, March 16th, 1998]

No, he was not kicked out of the Liberal Party. He saw the light but he went the wrong way and went right instead of left. My friend from Regina—Lumsden—Lake Centre obviously must be thinking of somebody else.

The president of the Credit Union Central of Canada is a fellow named Bill Knight. Bill Knight used to be a member of Parliament for the NDP Saskatchewan riding of Assiniboia. I know that my friend from Alberta knows that, because the former leader of the Liberal Party in Saskatchewan was an MLA from that riding when he worked for that particular MLA.

Bill Knight, as member of Parliament for our party and now the head of Credit Union Central, will be trying very hard to make sure we establish more and more credit unions across the country. I support the credit unions as the people's bank. It is grassroots and owned by the people. It is a co-operative and the profits are shared by the people.

It is not like the friends of my friend from Alberta who stands in the House and says that Conrad Black pays too much in taxes and that millionaires are overtaxed, which is what he said in the House last October. That is not our philosophy. We support the credit union and the co-operative movement.

[Competition Act, March 16th, 1998]

Mr. Speaker, I say to my socialist comrade from Alberta that talking about turning away from this, my friend from Alberta used to be the executive assistant to the now minister of agriculture when he was a Liberal. He knows all about turning away from things.

[Competition Act, March 16th, 1998]

I said “wheat pool”. Somebody does not know the history of co-operatives in western Canada.

If the merger goes through, it opens up a great opportunity for credit unions. We will see the closure of a lot of branches. We will see the opening of more and more credit unions. If this happens, I certainly encourage the credit union movement to get out into more communities and to expand existing credit unions. I support them all the way.

It is refreshing to hear a member of our most conservative far right wing party, the Reform Party, actually supporting credit unions. I am really pleased to hear that.

[Competition Act, March 16th, 1998]

Mr. Speaker, that is like the chicken lecturing Colonel Saunders, a Reformer supporting the co-operative movement and credit unions.

For my whole life I have been involved in the co-operative movement. I guess the member does not know my background, about my family being farmers. They have always taken their wheat to the wheat pool and have been members of the credit union. I am a member of the credit union.

[Competition Act, March 16th, 1998]

Mr. Speaker, I am very happy the member sent a survey out to his riding which came back four to one in opposition to the merger. I believe that tells us what the Canadian people are thinking.

I guess my question back to him is whether or not he would agree with me that we now need a parliamentary inquiry, a parliamentary committee, so his constituents and my constituents have a chance to speak out publicly on how they feel about that particular merger.

It would be very helpful if some members of the Liberal Party would rise and say publicly that we need a parliamentary investigation.

I also want to say to him that I do not believe the consumer legislation is strong enough for ordinary people. That is why we want to strengthen the competition bill. That is one reason for the particular debate today.

Historically our banks have been a very protected sector of our economy. That is why they have an obligation to be more forthright with Canadian people. That is why they have an obligation to reduce bank service charges, for example. That is why they have an obligation to be more generous in terms of loans to small businesses and farmers. I am sure the member agrees with me.

I believe we need stronger competition policy to protect the consumer, but I also invite him to rise with me in the House and ask the Minister of Finance in a very polite way for a parliamentary committee investigation right now made up of all five parties and not just Liberal backbenchers having hearings behind the scenes. That is not a parliamentary democracy.

[Competition Act, March 16th, 1998]

Well, I do not know if sumo wrestlers are prettier. That is in the eye of the beholder I suppose, but that is what these banks are like.

The irony of this whole thing is I know how lots of members of the Liberal Party feel about this. They have a caucus committee which is looking at the merger. We in the NDP are doing the same thing. I assume members of other parties are concerned as well. Why do we not get together and have a parliamentary committee look at it formally? We could subpoena the banks to come before us and give the Canadian people a chance to come here or we could go out to the provinces and territories and hear witnesses. Why do we not do that?

Why are we content as members of Parliament to be controlled by the Prime Minister's office all the time? Why do Liberal members not get up on their hind legs and say enough is enough? Let us have a democratic parliamentary institution where we can have a parliamentary inquiry into one of the most fundamental issues we are facing in this particular Parliament, the future of our financial institutions.

I see a Liberal member across the way and I know he agrees. I can hear his head shaking all the way across the floor. He agrees with me. He thinks there should be a parliamentary committee. I am sure the Reform Party feels the same way.

I am sure that the Bloc Quebecois also wanted a parliamentary inquiry on the future of our country's financial system.

If Parliament is not to debate important issues of public policy, then why in the devil is Parliament here in the first place? Why are we here if we cannot debate these issues, if we cannot have public hearings across the country, if we cannot subpoena witnesses and allow the people to speak their minds? That is what Parliament should be all about.

I know the member for Windsor—St. Clair certainly agrees with me. She is rising to her feet. Now she is smiling. She wants a parliamentary inquiry. She wants a chance to go after these mega banks. She does not agree with these large mega banks, but what can she do? She is muted. She cannot say a word. If she wants to be a cabinet minister, she does not dare speak out as the Prime Minister might get a little upset with her, and she will not be a cabinet minister. That is the kind of parliamentary system we have. That is why we have to reform this place and change it to make it more relevant to the people of Canada.

I suspect if we took a vote in the House we would find that the overwhelming majority of members of Parliament are concerned about this proposed merger. The Reform Party probably is. Liberal members are. The Bloc is. I assume the Tories are. And what are we doing about it? We make one or two speeches in the House. Let us turn this debate into a debate on this particular issue right now.

The banks have engaged a lobbying firm which is lobbying like mad to make sure the banks get their way. The banks across the country are advocating what they want and campaigning to have the right to merge. We are giving the banks a free run. That is exactly what is happening. As parliamentarians we are sitting here like a bunch of bimbos on our butts and not doing anything about it in terms of striking a parliamentary committee.

Let us turn this place into a relevant institution and have a parliamentary investigation into the wisdom or lack thereof of these mergers. However the Minister of Finance will not do it. He wants to be prime minister of the country. Who will he side with? Will it be the bankers of Bay Street or ordinary people? The member for Windsor—St. Clair has re-entered the House. I know she does not side with the bankers of Bay Street, but what about the Minister of Finance? Does he side with the bankers of Bay Street?

What does he do? He is afraid to face the music and have a parliamentary inquiry. I am surprised Reform Party is not up in the House demanding a parliamentary inquiry. I know it is a very conservative right wing party. It has more and more friends in the corporate elite. It falls in love with the Conrad Blacks of the world. Perhaps that is why its members are silent in the House about an inquiry into banking.

I see the member from Calgary, the revenue critic, shaking his head. I can hear that from here too. That is why the Reform Party does not want a parliamentary inquiry. I thought it was supposed to be a people's party, a grassroots party, speaking on behalf of ordinary people. It is not. It is becoming a party reflecting the corporate elite. It would not know a worker if it saw one.

Why are Reformers in a coalition with the Liberal government? Why do they stand four square with the Minister of Finance and the Prime Minister in terms of the way they are handling the banking issue? They should be out there saying let the people speak, let the people decide, let us have a parliamentary inquiry, let us have a parliamentary investigation to see if this is good for Canada or not.

Today we have a new opportunity with the bill before the House to talk about competition policy and why we have to strengthen it. We have the case in point today to deal with, the merger of the Royal Bank of Canada and the Bank of Montreal.

Mr. Speaker, I know if you were a member on the floor of the House you would be getting up to make the same kind of speech. In fact you are applauding me there in the chair right now.

[Competition Act, March 16th, 1998]

Mr. Speaker, I want to say a few words on Bill C-20 before the House this afternoon, specifically on the part that deals with the administration of mergers and merger notification process. I do that for only one reason. Very recently back in January we had a blockbuster announcement which surprised everybody in this country, namely the proposed merger between our largest bank, the Royal Bank, and our third largest bank, the Bank of Montreal. The concern that we have seen across the land since then should make us think seriously about strengthening the competition policy in this country, particularly with the administration of mergers.

I submit to the House that what has been done in Bill C-20 is very weak in terms of what it does with merger legislation in Canada. This is one of the few opportunities we have to talk about mergers and why we need stronger competition policy in this country. It is important to put that on the record today.

The case in point is the one everyone hears about on coffee row no matter where they are in the country, the two largest banks. The banking industry in this country has been very protected over the years in terms of content rules. No individual can own any more than 10% of an individual bank. That rule has been very clear. We have five or six very large banks and there has been a policy that large does not buy large or big does not buy bigger. Despite the fact that an individual may have a lot of money, he or she cannot buy more than 10% of any particular bank. This of course applies to my friend from Palliser or my friends from anywhere else. One cannot buy more than 10% of a bank in this country.

What we have here is a real surprise. Our largest bank, the Royal Bank of Canada, proposes to merge with the Bank of Montreal. The two of them have stock market value of around $40 billion. The largest merger to date in the history of this country is a merger of two companies worth about $14 billion. This merger is three times bigger than anything we have ever had in the history of this country. It is a very large proposition in terms of merging. The assets of the two banks are worth about $453 billion.

Four hundred and fifty-three billion dollars is a lot of money. It is a major proposal between two large banking institutions in this country that would lead to the creation of a mega-bank.

Yet in this country we do not have competition policy that is strong enough to adequately, in my opinion, look at a proposition of this sort.

The banks announced this very quickly. They took the Minister of Finance off guard. Since the announcement of the merger we have had skyrocketing in the share value of not just these two banks but the other banks as well.

In many ways the banks are saying to the Minister of Finance “We dare you to say no. We dare you to stop this merger”. They are saying to the competition bureau “We dare you to stop this merger”.

Unless we have stronger legislation or political will in this country, a domino effect will occur very shortly, by the fall of this year. Not only will there be the merger of these two banks to create a large mega bank, there will be other mergers as well which will lead to the great consolidation of banking in our country. If that happens there will be a couple of large Canadian banks.

These banks want to merge because they want to have access to foreign markets. Mr. Cleghorn and Mr. Barrett have made that very clear. Mr. Cleghorn is the president of the Royal Bank of Canada and Mr. Barrett is the president of the Bank of Montreal. They have made it very clear they want to be large on the world scene so they can compete in Europe, in Asia and in third world countries. If they have access to markets in other countries, then of course as a quid pro quo banks in other countries will want to have access to the Canadian market. Today they do not have that access. If our banks are to have that access, then of course the argument goes that our doors will be open for their banks.

All of a sudden we will lose control of the financial industry in this country. If that happens there will be immediate pressure to get rid of the 10% rule. If the 10% rule is gone, we will see the buying of Canadian banks by foreign banks and there may be no Canadian owned banks left. That is why this is such a vitally important issue.

It is important that we flag this issue in the debate on the competition policy bill before us today in terms of mergers and acquisitions. We can change forever the direction of the country, the financial independence of the country, the autonomy and the sovereignty of our great country of Canada. I am sure members would agree with me that it is a very important issue.

It is not only the sovereignty, the integrity and the independence of our country which concerns me. I am also concerned about service to ordinary Canadians. If we look around the country we will find that there are a lot of bank branches. In fact these two banks themselves have about 2,800 branches stretching across Canada. In a consolidation of this sort it is almost certain that a large percentage of those branches will disappear.

In fact the day in January on which the merger was announced I was in the small town of Outlook, Saskatchewan. Besides the credit union there are two banks. They are both on Main Street. One is the Royal Bank and the other is the Bank of Montreal. I could imagine the tellers in those banks looking across the street and wondering “Do you go or do we go?” Which one will go? There will be a consolidation and some branches will disappear. Many Canadians will no longer receive the service.

I am not just thinking of the rural people in small towns such as Outlook or Esterhazy, Saskatchewan, or indeed any town across the country; I am thinking about the metropolitan areas as well, the large urban centres. A lot of neighbourhoods will not have bank branches. Bank branches will be closed down in the inner cities because it will not be profitable to have all of these branches once there is a large, centralized mega bank in place.

From a competition point of view it is important that we look at strengthening the merger legislation in terms of service to ordinary Canadians. It is a great concern.

Another concern I have is the loss of jobs due to the merger. Some 92,000 people work for these two banks. Mr. Barrett and Mr. Cleghorn would have us believe that there will not be a loss of jobs, that jobs will be maintained. They have told us not to worry about the jobs.

Look around the world where banks have merged. Look in this country where banks have taken over trust companies and other financial institutions. What has happened? Around 20% to 30% of the jobs disappear. People are laid off. The same thing will happen with the merger of the Bank of Montreal and the Royal Bank of Canada if it is allowed to go ahead.

I am not only concerned about the ordinary workers in the banks. These two banks have head offices. What will happen to the jobs in the head offices when they consolidate? What will happen to the jobs of the people who run the technological systems and the information services as those two banks consolidate into one large corporation?

That is another argument why we need a strong competition policy. It is so when people are concerned about an issue like this one have recourse in terms of going to the competition bureau. We can do that today. I hope there are people who will take the initiative to go to the competition bureau and demand an investigation. I hope that happens. Even more importantly, what this country needs is some very strong legislation to make sure that does occur.

As I said before, it is a question of jobs. It is a question of service to rural communities. It is also a question of the kind of financial future we want in terms of our financial institutions. If this occurs, we are opening a whole new can of worms, a whole different future in banking and financial institutions in Canada.

It seems that these two big banks think they have the Minister of Finance on a leash. They have ambushed him. They believe he is going to give in and listen to the big bankers on Bay Street.

The Minister of Finance is saying “Let us wait a while”. There is a financial services task force looking at banking in this country. It is headed up by a very fine gentleman from Regina, Harold MacKay. That financial services task force has now been under way for quite some time. It is looking at all these important issues. The task force is going to report sometime in the month of September. After that the Minister of Finance is saying that the finance committee will look at the report and what is going to happen in the future of banking.

Mr. MacKay's task force is not looking at this particular merger. It has no specific mandate whatsoever to look at this particular merger. It is looking at all the other questions in terms of the future of financial institutions in Canada. For example the task force is looking at the issue of whether or not banks should be allowed to get into a full array of financial services in this country; whether or not banks can buy up insurance companies and sell insurance throughout their branches; whether or not banks can get into the auto leasing business. That is what the task force is looking at.

That is why we need right now a committee consisting of members of Parliament from all five parties in this House to look at the wisdom of this particular merger. That is why I am rising at this time to say that when we deal with competition policy we should be talking about the most important merger proposition in the history of this country, one that is so large that all the others pale in comparison.

The banks have been lobbying for years to sell insurance. The banks want to sell insurance. The insurance industry has been lobbying against the banks selling insurance. The Minister of Finance was very close to saying yes before the last federal campaign but the election was too near. Finally he said no, the banks cannot sell insurance.

The banks have been lobbying since then. They have engaged a very prominent lobbying firm which is based in Toronto and Ottawa to do the blue chip lobbying for them to allow them to go ahead and do their mergers, or to sell insurance, or to buy up insurance companies and to get into the auto leasing business. The more I talk about this, the more important issues there are that we have to deal with as parliamentarians.

In the last few years the banks have bought up brokerage firms. The only brokerage firm now of any size in this country that is not owned by a bank is Midland Walwyn. The rest are all owned by the banks. The Royal Bank has a large brokerage firm. The Bank of Montreal has a large brokerage firm. They both have trust companies. They are getting bigger and bigger all the time. Is that the right way to go?

We are supposed to represent the people of this country in this House. All of us. We are all elected as equals to represent the people, yet we do not have a parliamentary committee looking at the very important issue of the mergers and the future of banking and the financial service industry. That is absolutely and totally wrong.

We should turn this debate into a debate on a big specific issue, the merger of banks. I hope other members will get in this debate today and talk about this issue.

I want the Minister of Finance to do a very simple thing. I want him to strike an all party committee that has the power to travel this country, to hear witnesses, to hear input from the Canadian people about whether or not this merger should go ahead.

What is happening is the majority government across the way is being lobbied by blue chip lobbyists who say that the merger should go ahead. They say that the banks should have more and more power, the banks should have the right to buy and sell insurance.

In fact some of the banks are getting into what is called tied selling. There was an example of that last week. If you bought certain items from the bank or if you wanted a loan or a mortgage from the bank it was expected for example that you would shift your RRSPs to that financial institution. Those are the kinds of things that are happening.

The member for Regina—Lumsden—Lake Centre has just made a comment about how they expect the whole family to be involved. We bring our whole family into that bank. How big do these people want to be? They are like the big sumo wrestlers. They get bigger and bigger all the time.

[Privilege, February 26th, 1998]

Mr. Speaker, I want to make two brief points. I support the member who raised the point of privilege for the following reason.

The press release that was quoted by the two ministers across the way said that the fund will be managed, in terms of the fund will be there, and that Mr. Landry will be the chair of that particular fund. What they are doing is anticipating what Parliament may or may not do.

That is the basic point of the privilege. They are expecting Parliament to rubber stamp a ways and means motion, rubber stamp a statement by a cabinet minister. That is not what Parliament is about. We are the representatives of the people and we make that decision. They cannot anticipate that Parliament will agree with their particular bill. Therefore I think it is a genuine point of privilege.

[The Budget, February 26th, 1998]

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