John Solomon

[Competition Act, March 16th, 1998]

I am referring to the governments of Saskatchewan, British Columbia, Yukon and Quebec which have introduced social democratic policies.

It is my sense that the Competition Act, before the amendments were put forward, was a shadow of what it used to be. The new proposals will not strengthen it that much. It will be a little better in terms of responding to telemarketing fraud. However, it is a total failure when it comes to defending consumers, small business and jobs in this country. As a result of that, I am looking forward to the government making some amendments in those areas so we can support the bill.

[Competition Act, March 16th, 1998]

Mr. Speaker, I just want to say a very few words. Bill C-20 respecting the Competition Act is a bill I have had some experience with in the past.

There are a couple of good things in it. I will get the good things out of the way quickly because I want to provide some suggestions as to how we can improve the bad things.

The telemarketing fraud section is a good amendment. A number of seniors in my constituency in the province of Saskatchewan have been the victims of telemarketing fraud. As a matter of fact, it has been such a problem in western Canada that we have had to undertake to educate as many seniors as possible by sending out householders in my constituency to alert them to the potential problem of telemarketing fraud and what sort of action they can take if they receive calls or have been victims of this very nasty approach by suspicious so-called business people.

I also remind people that on CTV National News last night, David Goldhawk, a very well known crusader for many issues that are important to Canadians, in particular seniors, told a story about a senior citizen who was bilked out of a fair amount of money through telemarketing fraud. Through his intervention he was able to salvage most of the money she had been fraudulently bilked of. I wanted to mention that in my remarks.

With respect to the other parts of the bill with which I am not so happy, they pertain mostly to the merger notification process. It is my view that the merger notification process in the bill is inadequate and very weak. It does not address the real problems that I think Canadians want addressed. It is my view that it should be done in a way which strengthens the legislation as opposed to weakening it as it now does.

I want to make a very brief comment about the changes in Bill C-20 that are not necessarily attractive to me when it comes to mergers. Right now, as my colleague from Qu'Appelle outlined, the big bank merger before the country and parliament is an issue very near and dear to the hearts of many Canadians. Many people bank with those two institutions and have a lot of friends, relatives, neighbours, acquaintances and so on who are employed there. These mergers could potentially cost jobs.

I am wondering whether the government of the day, which has put forward these recommendations, has given any consideration to this aspect where mergers result in fewer jobs. As I read through the bill and through the accompanying notes of the minister, I found that this issue was not addressed at all.

I want to make reference in particular to how Bill C-20 deals with the Conrad Black and Hollinger takeover of Saskatchewan newspapers. In essence they purchased the Leader-Post , the Star-Phoenix and the Yorkton Enterprise , basically all the daily newspapers in the province.

Under the Competition Act, which we are now debating, this was processed.

The purchaser of the newspapers, Mr. Black from Hollinger Inc., would sit down and say “Here are the benefits of a merger”. In fact, the Competition Bureau would sit down with them and say “Here is a process in which you can undertake to accomplish the merger”.

Other than that, they have no responsibility to ensure that basic services are required or that some of the employees who will lose their jobs should be provided with alternate training or some sort of severance arrangement, enabling them to gain employment in other parts of the country.

I am very concerned about this in relation to jobs in particular because mergers, whether the newspaper mergers of Conrad Black and his company Hollinger Inc. or the bank issue before the House of Commons, will result in significant numbers of families being affected.

It is estimated that for the bank merger alone, somewhere between 15,000 and 30,000 jobs are potentially at risk. I think that is a serious enough implication of a merger that the House of Commons and the Government of Canada should be taking a review of this matter.

I join with my colleague, the member for Qu'Appelle, in calling for a parliamentary committee to ensure that the mergers (a), are necessary, and (b), are going to be beneficial to the country that provides them with the charters to bank in the first place.

It is my sense that the resulting review of the merger situation does not provide satisfactory evidence and that it will benefit Canadians and people working in Canada if the merger is allowed to proceed anyway.

Maybe we can provide other people who will provide banking services to Canadians with the charters that they are due and entitled to under the Bank Act.

Of course where these jobs will be lost will be all over Canada but mostly in rural Canada, in small town Canada, particularly in communities where both the Bank of Montreal and the Royal Bank have branches.

I wonder, when we are considering a merger and we have the commissioner of the mergers reviewing the merger, why we cannot have a commission and a Competition Act that asks merging companies how many jobs the merger will create in this country as opposed to how many jobs will be lost. There should be some regulation about that.

Maybe we should have in this Competition Act some sections that call for a community reinvestment act. That would be a novel idea. It means that if they are going to merge or move an amount of capital around, they should be answering about how many dollars should be reinvested in the communities where they made their profits. That would ensure there is certain economic activity and that they were returning some of those profits to the community where they were earned.

People in parts of Canada say “This is just another left wing idea”. It is not that left wing. It is actually in existence in many countries in this world. The home of free enterprise and capitalism, the U.S.A., has a reinvestment act, the Community Reinvestment Act.

When the Bank of Montreal bought the Morgan Bank in Chicago just a few years ago, before the purchase of the Morgan Bank was allowed to proceed under U.S. regulations, the Bank of Montreal had to commit $497 million to reinvestment in Chicago and district alone because that is where the Morgan Bank was servicing clients.

It had to commit $497 million over a period of time. I believe it was over five years. They had to invest in small business, in low cost housing and in other areas where they were getting a return. It had to commit that amount of money to reinvest in those communities.

Why can we in this Competition Act which we are debating today not have sections that would encourage, if not provide, an opportunity for a reinvestment act in this country? I think Canadians would welcome this. They would embrace this act. I would assure the government opposite that the NDP would certainly support that initiative.

I want to leave these recommendations with the government. I think they are very important. I also want to say that the Competition Act should also consider the MAI, the Multilateral Agreement on Investment.

The Multilateral Agreement on Investment will affect the Competition Act. If the Competition Act is in law and is operating in this country, will the MAI supersede an act of this Parliament with respect to competition? We do not know the answer to that. I hope the government will respond to it. Although the Competition Act is fairly weak, we should be mindful of the opportunities and the challenges which the MAI will provide with respect to this particular issue.

The final point I want to make pertains to the lack of teeth in this bill. I have brought forward issues in the House of Commons such as gas pricing, where the competition bureau reviews superficially gas pricing practices in this country, but does not have the authority to go into corporations to look at documents like it used to be able to do under the Combines Investigation Act, which was abolished by the former Conservative government of Mr. Mulroney.

That legislation was abolished because, from the large corporations' perspective, it was intrusive. Of course intrusive meant that the anti-combines people could in effect look at mergers or the purchasing of companies to ensure that the public interest was defended and protected. Consumers were protected and defended. Now that legislation is gone and we have the Competition Act, which is a shadow of its former self.

Even the United States of America has anti-combines legislation on its books to this day. There is more powerful legislation in the homeland of capitalism, in the land of free enterprise, than we have in the so-called social democratic country of Canada.

[Points Of Order, March 10th, 1998]

Mr. Speaker, I rise to offer the NDP's view on this point of order which I believe is an extremely important matter that the government House leader has raised.

I was a member of the Saskatchewan legislature for almost 10 years. I have been a member of this House of Commons for about four and a half years. I have never seen such a blatant action of hooliganism in my view by any political party anywhere in Canada in those 14 years.

If the issue with respect to the Reform Party was a matter of foreign policy, what they did was not raise the issue of foreign policy but try to raise political points on the Speaker which in my view, and what should be the view of every member of Parliament in this House, is that the Speaker's position is sacrosanct and should be independent.

It is perhaps ironic that today was the national lobby day for the Canadian Police Association. In my discussions with them we talked about a number of issues, including the Young Offenders Act and hooligans and yet, maybe in spite of the national lobby day by the police association, we see a very blatant display of hooliganism right in this House of Commons. They have tried to hijack the House of Commons and I personally take offence at that.

The final point I want to raise is in reference to what the Reform whip has made reference to but did not finish reading. That is citation 164 in Beauchesne's Parliamentary Rules & Forms . The Reform whip read:

The Speaker:

(1) Communicates the resolutions of the House to those to whom they are directed—

He did not finish the sentence, which continues on:

—and conveys its thanks and expresses its censure, reprimands, and admonitions.

It is my view, Mr. Speaker, that you should study this issue, study the point of order that has been raised by the government House leader, and in your capacity as Speaker if you find that this is a point of order relevant to Beauchesne's, that you take your authority and reprimand the Reform Party for its disgusting action in this House of Commons.

[Division No. 96, March 9th, 1998]

Madam Speaker, in question period on February 2 I asked the finance minister what proof he could give the House that the monster merger between the Royal Bank and the Bank of Montreal would be better for small businesses, farmers and Canadian communities. I asked at the very least if he could promise it would not make things worse. The minister replied that the government had asked the task force on financial services to address service to small business in its deliberations.

His answer offers little reassurance to small business owners or farmers in my riding and in other parts of Canada. No one believes the task force should be allowed by the Liberal government to consider anything other than the interests of Bay Street and the agenda of the big banks. That is why the NDP has been calling for a parliamentary inquiry with full cross-Canada public hearings so the people of Canada can speak to elected MPs about their concerns regarding the bank merger.

It is pretty clear from the Canadian Federation of Independent Business study entitled “Credit Where Credit is Due” that small business is pretty close to fed up with the treatment it is getting from the big six. CFIB president Catherine Swift told the Globe and Mail that “the proposed merger between the Royal Bank of Canada and the Bank of Montreal is worrisome to small businesses because they want more, not fewer financial institutions to choose from. The prospect of reducing the already few players to even fewer is not a happy one”.

Eleven per cent of small business loan applications were rejected by banks last year. This is up from 9% ten years ago, a full 2% increase. Other studies show that only 3% of bank loans granted by the big six are under $100,000.

In addition the CFIB found that small business loans are priced well above loans to their larger counterparts and the gap is widening. Big loans to big business equal small service charges to big business, whereas small loans to small business equal big service charges to small business. Is this fair? I think not.

The greatest problems for small businesses occur when they have to deal with the very high turnover in account managers at the big six banks. Many firms deal with three or more managers in as many years. This situation is unlikely to improve if the monster merger and others like it are approved. The banks seem to be more interested in chasing risky international commercial loans than in servicing their small business customers in Canada.

We have no reason to believe that foreign banks will provide any more than minimal staff in our country. Meanwhile the bank merger could cost up to 30,000 Canadian jobs.

The finance minister made the bizarre and quite desperate accusation that somehow the NDP has found new friends in the banks. As my leader said, he should look in the mirror. His party accepted a quarter of a million dollars in donations from the Royal Bank and the Bank of Montreal last year, and he himself received a tidy $1,000 from Royal Bank chief executive officer John Cleghorn for his own campaign in addition to another $1,000 from Nesbitt Burns.

The government can make some choices. It can choose to approve the monster merger and reduce competition still further or it can pass a community reinvestment act and require the Canadian banks to do their job and service the credit needs of small businesses, farmers and communities in our country. If these minimum requirements are not met, perhaps issuing a bank charter to Canadians who want to meet these national objectives should be looked at.

If the chartered banks will not do what they are supposed to do for Canadians under their charter, maybe their charter should be given to those who will.

[The Budget, February 26th, 1998]

Mr. Speaker, I listened with interest to the Liberal member's comments regarding higher education. As many members of the House of Commons know, the hon. member for Vancouver Quadra has been involved in education for his entire career. I am sure he understands as a former university professor the plight of post-secondary education students, in particular as it applies to their finances.

In my constituency there are many students who have $25,000 to $40,000 in student loans. Some of them are unemployed after graduation and are unable to meet their obligations to repay those loans.

I am wondering if the hon. member could enlighten us and provide us with his views as to whether or not the millennium fund will be of any assistance to the people I have described in his constituency, in my constituency and right across the country. How will they be assisted in repaying their loans when they are unable to find work?

As an educator, how does he feel about whether the government should be assisting students who are in university now who are unable to obtain appropriate financing for their education? I would like to know his views on that issue.

[The Budget, February 25th, 1998]

Mr. Speaker, in question period on November 25, I raised the issue of the need for a community reinvestment act in Canada. At that time I asked the finance minister why, if the United States has a community reinvestment act and if Canadian banks such as the Bank of Montreal have to live by its provisions when they buy American banks like the Harris bank in Chicago, we could not enact a community reinvestment act in this country.

The Liberal reply was right out of the briefing book supplied by the Canadian Bankers Association to all members of Parliament. I wish his officials would expand their reading list a bit on this topic. He misstated the purpose of a community reinvestment act and implied that it would ghettoize parts of Canada in terms of loans and investments made by the banks.

I will explain what a community reinvestment act really is for the secretary of state in the House. I will also explain why the New Democratic Party advocates this policy. When the Bank of Montreal wanted to buy the Harris bank in Chicago in 1993, U.S. regulators delayed approval until it met obligations under the American community reinvestment act to provide loan funding for small business and community development in the Chicago area. Eventually about $497 million Canadian in loan commitments was made to local housing projects and area small business over a five year period.

This idea has never been more relevant with the announcement of the monster merger of the Royal Bank and the Bank of Montreal. According to last Saturday's Globe and Mail , 206 communities in Canada rely solely on either the Royal Bank or the Bank of Montreal for banking. Matthew Barrett of the Bank of Montreal said yesterday that none of them will close but I think there are 206 communities in Canada waiting for the other shoe to drop.

Other banks are pulling out of communities. In January, on the day it announced record profits to its annual shareholders meeting, the CIBC closed a branch, the only financial institution in Lynn Lake, Manitoba. A Braxton Associates study last year estimated that 5,700 bank branches will close over the next decade, putting as many as 35,000 employees out of work. We will start to see bank branches in small communities closing as fast as post offices. The merger mania is one of the reasons these branches will close. It is a sad commentary on the declining attention being paid to the needs of rural life in Canada.

A community reinvestment act makes financial institutions accountable for their behaviour in our communities. It requires the banks to invest in the communities deemed in need. In the U.S. banks have to prove they are meeting the credit needs of small business, community economic development and low income residential mortgages. They have to keep lending statistics on loan requests, denials and approvals, and report their record in lending to visible minorities, women, low income neighbourhoods and so on.

It requires those financial institutions to commit funds in order to meet these needs and to work together with community groups and businesses to make plans for doing so. It is not rocket science. At first, U.S. banks did not like the idea but now they have found they have very low default rates on residential mortgages. Matthew Barrett knows all about it. He had to comply with these regulations before he bought the Harris bank in Chicago.

My point is this. We need jobs in Canada. We have a higher unemployment rate than in the U.S. Banks are making record profits in Canada but they are not investing in small businesses that create jobs or meeting their responsibilities to smaller communities in Canada. In the U.S. they have to do it by law.

Here is one way for them to do it. Why does the government not consider this idea?

[Petitions, February 25th, 1998]

Mr. Speaker, I appreciate that advice. My final petition is pertaining to the tax system in Canada. These Canadians are very concerned about the unfair tax system and they are calling for fair tax reform.

[Petitions, February 25th, 1998]

Mr. Speaker, the second petition pursuant to Standing Order 36 is from a number of Canadians who are very concerned about the multilateral agreement on investment.

These Canadians are concerned that the House of Commons would be signing this without public debate. They are calling on the government and the House of Commons to debate this issue in the House publicly and to place the issue, if the Government of Canada decides to sign the MAI, before a national referendum for all the people of Canada to make that decision.

They are concerned about this because obviously the rights of Canadian citizens and the power of the Government of Canada would be greatly superseded by those foreign—

[Petitions, February 25th, 1998]

Mr. Speaker, I have three petitions to present to the House today pursuant to Standing Order 36.

The first one is a petition signed by many Canadians who are very concerned about the seniors benefit and are calling on the Parliament of Canada to undertake to review the entire retirement income system in Canada to ensure there is adequacy in the system today and tomorrow.

[Points Of Order, February 24th, 1998]

Mr. Speaker, my point of order concerns the arrangements for the debate on the budget which will begin later this afternoon following the Conservative point of order.

The standing orders of the House were drafted to accommodate three parties in the House, but the Canadian electorate last June sent five parties to this House.

I am seeking unanimous consent to put forward a motion to alter the arrangements—