Nelson Riis

[Bank Act, March 19th, 1999]

My friend says that we know what the cart is full of. Yes, we probably do know what it is full of. That is why I say I feel like a rubber stamp today. I know that by and large the debate is absolutely meaningless in terms of having any influence on the future outcome of the legislation. It is incredibly frustrating.

There is another aspect to the legislation. I listened carefully to the explanation of the secretary of state on how this would be helpful to the average citizen. I made some notes as well. I probably used my own wording. I do not think he said it was some version of the trickle down approach, but that was my interpretation of what he was talking about.

If we could provide large foreign banks with an opportunity to come into Canada and compete with our banks at the upper end level of huge corporate business, he said that the benefits would eventually trickle down to the normal folks of the country. In other words, give a break to the large international banking community, the large international banks, be patient and eventually the benefits will trickle down to the average citizen.

[Bank Act, March 19th, 1999]

They will be losing money to the other guys and have to go elsewhere for their profits. Service charges are a lucrative aspect and something they could easily introduce.

Let us acknowledge very clearly the debate we are having today. The legislation will go to committee, come back here for debate and off to the Senate. That is essentially meaningless because it is a done deal. The government commitment at the World Trade Organization back in December 1997 was that it would do this. Therefore parliament is irrelevant. Parliamentarians are irrelevant. The finance committee is irrelevant.

Let us consider what we are doing today. We are talking about a major change to Canada's banking. We have just gone through a long process of looking into the future of Canada's financial services sector. A huge report was recently tabled.

The government says it will come out with a white paper to talk about the future of the financial service sector in Canada over maybe the next decade or two or three. Why are we taking this decision today on introducing foreign banking? This seems to be the cart before the horse. The horse is not out of the barn and the cart is already running down the road. There is something wrong with this process.

[Bank Act, March 19th, 1999]

As my friend from Winnipeg says, they will probably even go up.

[Bank Act, March 19th, 1999]

Mr. Speaker, I want to acknowledge my Reform friend for co-operating earlier. I appreciate it very much.

Bill C-67, an act to amend the Bank Act, the Winding-up and Restructuring Act and other acts relating to financial institutions and to make consequential amendments to other acts, is opening the door to foreign banks coming into Canada. Let us make that clear.

We have heard about some of the concerns raised by others, some of the benefits and so on. I will venture out and do something that I think is unusual for a politician and attempt to predict the future. I have no corner on wizardry or looking into a crystal ball, but it does not take much crystal ball gazing to figure out what is going on.

The other day I said that sometimes when I stand in the House to make a speech I feel a bit like a eunuch. I do not mean that in any kind of personal sense. I mean it in a helpless sense, in kind of a worthless sense. What is the point? It is sort of the opposite of the Viagra issue. Why are we doing this? Sometimes I feel like I am a great big thick rubber stamp with ink all over one side of me, and every now and then I am asked to rubber stamp something that is going on.

I have a choice. I am either a eunuch or a rubber stamp. I will probably go with the rubber stamp classification. Why do I feel this way? Those in the gallery, those watching television, those listening in and those who will read Hansard or perhaps watch the CPAC version later today will be under the impression that we are debating whether or not to proceed with allowing foreign banks into the country. There will be some good ideas, some bad ideas, concerns and so on, but there will be an impression that we are actually debating this issue and that the debate has some consequence.

It does not. It has no consequence at all. Just as sure as the sun came up this morning, the legislation will pass expeditiously. It is not because most parties will support it. It will pass expeditiously because the government has committed to the World Trade Organization to pass the legislation by end of June.

What does all this mean? Let us look at the details. First we got a clue, not from the Canadian government, not from any government press release, but from the Wall Street Journal . Those of us who read the Wall Street Journal on November 10, 1997, would have noticed the article “Financial services talks heat up”. That article stated that Canada would submit a revised offer committing itself to open branch banking to other WTO members. In other words, Canada made a commitment on November 10, 1997 to open up its doors to foreign banks. We did not learn about that in Canada. We had to read it in the Wall Street Journal .

On December 12 a government press release came out stating that Canada welcomed WTO financial services agreement. Services such as banks and insurance companies of a foreign nature would have access to Canada. That was the formal announcement.

Just a few days later guess what other announcement was made? It was the announcement that the Royal Bank and the Bank of Montreal were to merge. They had read the newspapers as well. They were aware that the Canadian government had negotiated a deal with the World Trade Organization to allow foreign banks to come into Canada. The Royal Bank and the Bank of Montreal said they had to do something about it. They had to get a little tougher and bigger and merge in order to confront the foreign banks being allowed into Canada and made that announcement. This apparently shocked the Minister of Finance.

Knowing the discussions that take place around these issues, I suspect the banks were aware of the discussions in the World Trade Organization regarding financial institutions. I am sure the Department of Finance would have been in touch with the major banks of Canada to alert them to this fact.

What did the Minister of Finance expect, that the Canadian banks would just sit there and say that any foreign bank could come into the country and be able to operate? They had to take some steps to protect themselves, and merging was one of the options.

I will make a prediction today. Soon, because of the foreign banks that will be coming into Canada, in particular at the commercial level, and because of the increased competition from these great big foreign banks we will have to revisit the idea of bank mergers. In order to compete the Canadian banking industry will have to take on the international banking giants. They are too small to do it on their own so they will have to merge in some form. Will the Minister of Finance be open to some aspect of merging?

We now understand the changing world conditions and the changing conditions of international banking. We have huge American, European and Japanese banks now operating in Canada at the commercial level. We have to protect our Canadian banks and allow them to grow. Then the debate will be over and mergers will be announced in due course.

That is my prediction. I hope I am wrong in my prediction but that is the way I suggest things are likely to evolve.

What does the legislation do? I listened to my friend, the secretary of state for financial services. He is a man of great integrity. He is a man whose words I listen to carefully and whom I often support. I am encouraged by his openness. We will notice in today's issue of Hansard that on the issue of whether foreign banks coming into Canada will help the small business community he said hopefully. That was his word. He was hopeful the foreign banks would be providing services to Canadian small business that are in search of capital.

I give the minister credit because he certainly did not say that this would be good news for small business. He said that he was hopeful. I give him credit for being hopeful at least. Surely we ought to do something more than simply being hopeful that small business will have better access to capital. I will set that aside for now.

Anybody who believes for a moment that Bill C-67 will result in foreign banks coming in and providing much needed competition for the citizens of Canada is dreaming in Technicolor. That will not happen.

It is clear. They are here. They are interested in commercial banking. Their primary interest is not in retail banking. They tried that. We had all kinds of foreign banks coming to Canada in an effort to provide retail competition. Most of them have left or have identified a small niche market which they are in at the moment.

By and large, expansion in the retail banking sector by a foreign bank will simply not happen. The big Canadian banks have that market pretty well sewed up. There will be a creaming off of the system. We will have increased numbers of foreign banks competing with our national banks to get the best business.

One thing about big business is that it does not now rely on Canada's banks. Big business has access to capital on a global scale. It can access capital in Europe. It can access capital in the United States. It can access capital in Asia.

This is not necessarily a problem. Basically we will have some big banking giants competing with our banking giants for the very lucrative top end commercial market. That is fair enough. That is what will happen. That is what the banks say they are interested in. They are not interested in providing more competition at the retail level.

In other words, they are not interested in providing competition that will benefit the people of Canada in any meaningful way. They will not open branches in small communities. They will not open branches in rural communities. They will not provide better services in small towns of Canada or in the suburbs of our cities.

They will be on the main street. They will be on the Bay Streets of Canada competing for the international global capital market. That is where they will be. Let us understand the average Canadian citizen will not benefit by the existence of foreign banks in this country.

For those people who are operating small businesses in Canada, for those people who are probably operating medium size businesses, for those people who are self-employed, running home based businesses or small operations, foreign banks will be of little if any help at all. That is not the market foreign banks are looking for.

In terms of the problems of accessing capital, the problems of establishing good operating lines of credit, and the problems of accessing money for small entrepreneurs, for small business operators and for self-employed individuals will not be assisted in any meaningful way by allowing large foreign banks to open operations in Canada.

The legislation says that to open an account the minimum deposit is $150,000. How many people have $150,000 to deposit into a bank just like that? We are talking about a certain amount of people, not average individuals interested in the banking services of Canada.

When I listen to some of my friends saying this will create competition for Canadian banks in terms of getting them to lower their service charges and so on, it is just by and large dreaming in Technicolor. That will not happen.

[Petitions, March 19th, 1999]

Mr. Speaker, it is again an honour to present a petition pursuant to Standing Order 36 on behalf of a number of residents of Chase, Salmon Arm and the general Shuswap Lake area.

The petitioners are concerned about the recent developments regarding the export of water and list a number of concerns they have.

[Bank Act, March 19th, 1999]

Mr. Speaker, I have to rise on a point of order to ask my hon. friend a question. He just said that this new legislation will provide many opportunities in the retail banking sector, particularly for small business. How can he say that with a straight face?

[Income Tax Amendments Act, 1998, March 18th, 1999]

Mr. Speaker, I had a vision as my friend was speaking. It was a vision from Hindu philosophy of a multi-armed goddess. She has about 15 arms. I imagined these arms going into every back pocket and every front pocket, picking our pockets.

What my friend did not mention was the new tax collection agency, a monster tax collection agency that not only will have federal hands going into people's pockets but will also have provincial hands tied in.

Somebody said it is like a drunken sailor taking taxes. It is not like a drunken sailor spending money, because drunken sailors spend their own money. These guys spend other people's money.

Again, to say that none of this is worthwhile would be folly. Of course many of the provisions will be helpful. It is like the situation of a young boy begging on a city street, obviously living in a horrible situation. The boy stands there with a cup and asks for a dime. Someone gives him a dime and thinks the kid should be thankful, he should be happy with that. That is what we are getting here, little dimes in the beggars' cups and we are being asked to say is this not wonderful, thank you very much, Mr. Minister of Finance. These changes are a mere a pittance.

My friend from Vancouver talked about the student debt load, the horrible situation young people face trying to afford an education. We are supposed to be up here leaping for glee because they are now going to possibly deduct some interest from $26,000 to $50,000 student loans. It is sad.

There are minute improvements to our tax system. But when we have to back up a pickup truck for the piles and piles of this stuff, this is not the way to approach real tax reform.

I welcome my hon. friend's suggestion that we raise this at the finance committee. Perhaps one day we can initiate a real process of tax reform coming out of this House of Commons.

[Income Tax Amendments Act, 1998, March 18th, 1999]

I am asking him a question. I ask the Parliamentary Secretary to the Minister of Finance, why not go through our tax act, do a cost benefit analysis on every single major tax exemption and if it does not make financial sense, toss it out?

[Income Tax Amendments Act, 1998, March 18th, 1999]

Mr. Speaker, my Liberal friend says this is simple stuff. Maybe to a certain kind of mind this is simple stuff. But to an intelligent mind, it is gobbledegook. Look at it. I know I cannot hold up a prop, but this really is not a prop. Look at all of its pages. They are all grey. There is no white, because if it is grey, it is open to interpretation.

Imagine those guys who work in Revenue Canada and have to deal with this book day in and day out. It takes a special kind of personality to handle that kind of stuff. Thank God they have it because I know I do not have it.

There are no white pages, they are all grey. Everything is grey. If one has a good tax lawyer, a good tax accountant or a good tax adviser, one can probably get out of paying the kind of taxes one ought to be paying. That is what it is all about.

There are hits. Walk into any major bookstore today, and the best-sellers are right at the front. What are they? Ways to avoid paying taxes. Jacks tax adviser, Mary Jane's and so on, everybody has a favourite tax book and it is updated every year because these things change every year. That is what we are doing today. They are mainly designed to show how to avoid paying taxes. They are today's best-sellers. I am sure my Conservative friend would agree.

Serious players probably have them for their night time reading. People can go to seminars on how to avoid taxes altogether. It is called a tax haven, the Cayman Islands, the Bahamas or the Isle of Man, all sorts of things. For a nice fee, these seminars will lay it all out, how to avoid paying any income tax at all.

This is a depressing debate today. These provisions by and large are probably fairly decent. There is a tidbit here to help this group, a minor change to help that group, but nothing will change. It is just more gobbledegook, more complexity and more fuzziness in the tax system and people will be happy for the little bone the Minister of Finance has tossed them in this little change.

Canadians are demanding real tax reform. They want to change the system. They want to toss out the pickup truck full of books and start all over again. They want a real tax system, a progressive tax system. They want to stop the use of the tax system to achieve all these minute changes in today's society.

The Parliamentary Secretary to the Minister of Finance is here. I value his judgment. I hope he asks me a question.

Is it not time that we sat down as a finance committee or as a committee of the whole parliament and went through our tax act? Let us identify the major exemptions in our tax act and apply a cost benefit analysis to every single one. What is the cost of this tax loophole, or tax exemption, and what do we get from it? If it is not clear that we get more than it costs, then we should toss it out the window.

[Income Tax Amendments Act, 1998, March 18th, 1999]

It is perfectly clear. It is simple. It cannot be revoked after all of that.

A person would have to have 50 law degrees to figure out what on earth that says. Let it be perfectly clear, this is what this is all about. There is more gobbledegook in this piece of legislation. There is more muffle buffle jumble bumble than we can imagine. If one has a well paid tax lawyer or a very experienced tax adviser, one can buffalo almost anybody into saying this should be deducted, that should be deducted, and so on. It is like I am reading from some sort of tragicomedy.

I could read tens of thousands of other pages, but I would challenge every one of the bright MPs in this building to say that they understand even one page of the tax act. I know nobody here is able to. The ones who are not here today, maybe they are the intelligent ones.

Those who have to deal with this tax act will be unanimous in saying that no one knows what the hell it says.