André Bachand

[Bank Act, March 19th, 1999]

Mr. Speaker, I will not talk about the Conservative Party either, except to tell the NDP member that there is a Conservative government in Alberta, in Manitoba, in Ontario, in Prince Edward Island and in Quebec. As members know, there are two former Conservatives in Quebec: one is the province's premier, while the other one is the leader of the opposition. Therefore, there is a Conservative government in Quebec. This is just a joke.

[Bank Act, March 19th, 1999]

The hon. member for Hochelaga—Maisonneuve said that branches are being closed in his riding and, as I said in my speech, this is happening even though the banks were not allowed to merge.

Branches of banks and of caisses populaires are merging, and people are afraid that this will happen primarily in less advantaged communities and neighbourhoods. Unfortunately, rural areas are always less advantaged, and the major urban communities always have disadvantaged areas more likely to be without any suitable financial services.

When we speak of a financial safety net for investors in Quebec and in Canada, what we mean is that people need protection. If there can be some kind of tax or refund to the taxpayer, why not?

[Bank Act, March 19th, 1999]

Mr. Speaker, what is inevitable is that, even within the Bloc Quebecois, there is no consensus on this. Perhaps the addition of a few Conservatives to the membership has confused things a bit, who knows.

One thing we do know is that the presence of former Conservatives within the Bloc Quebecois sometimes gives rise to worthwhile logic.

[Bank Act, March 19th, 1999]

The Bloc? That would be 5.5.

What happened is that financial institutions did a cleanup. One of them, which I will not name, decided that it would get rid of all its customers' accounts with a rating of 6, 7, 8, 9 and even 5. This means that if you are a customer and have a hard time making ends meet, when the time comes to renew your personal loan or whatever, the bank informs you that it will not renew your loan. It cleans up its financial portfolio.

All of sudden, the customer is faced with the bank's refusal to renew the financing. Think about the person who goes looking for alternative financing. In the old days, Household Finance, not to mention it, was there just in case. Even that institution has tightened up its lending conditions, now.

The situation regarding our country's financial institutions was not planned properly. Many changes occur and people are very concerned. If we look at what is going on in Quebec, or in the rest of the country, we can see that people are worried about what will happen to services.

I see my Bloc Quebecois colleague nodding. People in Quebec are very concerned about what is going on. My colleague, the member for Sherbrooke, explained it very well. Right before an election, the Government of Quebec introduced a legislative amendment allowing people to be more closely involved, by filing complaints about financial institutions in Quebec, including the caisses populaires.

What power does this body have? To receive complaints, the way the ombudsman does? It has no legislative authority, just political.

Bill C-67 represents an obligation, with international agreements that must be observed. I cannot examine the bill from a fiscal point of view today. I am sure members would be able to follow me, but I do not really know myself what I would say. It is a very complex issue.

My criticism is that this bill should have been discussed rapidly after the agreement between all the WTO countries with a view to standardizing the international financial system. That is when it should have been done. This was a political issue. I use the word political, rather than economic or financial, advisedly. The political issue was bank mergers.

Apples and oranges were compared, oil was thrown on the fire, and things were confused generally with respect to the banking issues. It is most unfortunate.

In future, I hope that the necessary time will be taken to ensure that there is a financial safety net for Quebeckers and all Canadians. They will need one.

[Bank Act, March 19th, 1999]

Mr. Speaker, I followed this debate with a great deal of interest, including the comments of the hon. member for Kamloops, Thompson and Highland Valleys, who displayed an unprecedented degree of frustration with government members.

The hon. member for Kamloops, Thompson and Highland Valleys has been here for quite some time. He can usually live with his frustration. If he ever has problems, he can always go to a therapist, including one from the Reform Party.

My colleague and friend, the hon. member for Sherbrooke, also expressed a great deal of concern about clause 7.1. I hope the decision not to support the bill will not be based on clause 7.1. After all, that clause includes the key word “may”. As members know, there are many problems concerning financial institutions in Quebec.

What happens is that the financial system is changing because of the WTO, among other factors. But the problem is more global than that. It is not the first time that we go through this kind of major change. We experienced a similar situation 25 or 30 years ago, when federal and provincial legislation was adjusted. Quebec had made legislative changes to prepare the ground for the major shakeup that had taken place.

These changes had a very negative impact on certain lending institutions in Quebec but, in the end, consumers were the winners.

What is clear is that today's bill is the result of WTO negotiations. This bill should have been debated in the House shortly after the WTO hearings. Officially we were told we had to wait for the report on bank mergers, but in truth, the finance minister wanted to wait for the decision on bank mergers to avoid giving the banks any legal argument regarding the fact that foreign banks are beating a path to our door. They are now in. It is made official by this bill, they are moving in.

Is Canada ready for this? Is Quebec ready for this? Probably not. The government made political hay on the issue of bank mergers. I can guarantee that this same government. which prevented bank mergers from happening in 1998, will allow them to go ahead in 2000 or 2001. Mark my words. It said no then, it will say yes later. Why? It will argue that the international environment has changed. The proof will be in the fact that Bill C-67 will have been passed by this House.

The move towards bank mergers in Canada is not over. What we and others fear however is that bank mergers will lead to a massive concentration of financial markets, insurance and car loans.

It was also feared that bank mergers would bring about a major reduction in services to savers in Quebec and Canada, particularly in rural areas. Guess what is happening today? Bank mergers are not allowed to go ahead.

A number of banks announced massive layoffs. Many banks, big and medium one, will announce branch closures. In Quebec, the flagship caisses populaires have announced—and will be discussing on the weekend—a major reorganization of local caisse populaire federations. Over 300 small caisses populaires in remote areas are going to close. Massive layoffs are taking place throughout Canada's financial sector. And there have been no bank mergers yet.

This has been made into a strictly political issue and the broader picture largely ignored. Yes, foreign banks are entering the country and yes, foreign banks will increasingly take hold. Yes, it is true that, with computer technology, an American credit card can be used to pay bills in the United States, that a car can be bought through the Internet, and an American loan taken out as well. All that is true.

Bill C-67 legalizes only a small part of what is now going on internationally. Whether we like it or not, even though the major banks have not been allowed to merge, major changes are still taking place.

And yet, the number of branches is still dropping. And yet, the job losses expected to follow bank mergers are occurring; it is just less obvious. The Minister of Finance has arranged not to be held responsible for branch closings and job losses by saying no to the bank merger.

These branch closings and layoffs are therefore being blamed on the nasty Canadian banks and Quebec's mean caisses populaires. It is their fault, and the ministers of finance in Ottawa and Quebec City are off the hook.

A wonderful opportunity has been lost to set up a financial safety net for the savings of Canadians. We missed an opportunity. At present, there are no bank mergers but there is no financial safety net either. In remote areas in Quebec and Canada, branches are closing, services are being reduced and fees are rising. This is what is going on. And yet, there have been no bank mergers.

Bill C-67 will legalize something we already know is coming. There will be a complete reorganization. At the end of this year or at the beginning of the year 2000, there will be other applications for mergers.

We can be wiser, because Canadian banks know that the American and foreign institutions are coming. There could be a legislative change which would not bring official mergers of Canadian financial institutions. However, the legislation says nothing about services agreements, at present. We should not be surprised if the Royal Bank, the Bank of Montreal, the Toronto Dominion Bank, the CIBC and Scotia Bank sign service agreements without going as far as merging.

In a town with a population of 6,000, for instance Asbestos in Quebec, where there are several bank branches, we can be sure that one of these branches will close while the other remains open. There will be service agreements. Each branch will keep its sign outside, but the number of branches of each bank will be reduced.

If there are no legislative changes, the government will have to deal with the situation and allow one or several bank mergers, or pass a bill at the last minute to set terms for bank mergers or service agreements between financial institutions, otherwise the market in Canada and Quebec will be taken over by foreigners and we will not be prepared for it.

Yes, we are open to competition. Yes, we are not afraid to have our institutions and businesses compete in the United States. Yes, we are prepared to let the Americans into our country with their financial services. But can we be prepared with a financial safety net, which will guarantee that the people of Quebec and of the rest of the county will be protected?

Reduced service charges, more customer services, continued services to rural areas, these are some of the demands that were made when the whole issue of bank mergers was being discussed. Unfortunately, the issue got rather clouded and today Bill C-67 reflects only part of the discussions.

Bill C-67, which was to be voted on in the House, was held up in order not to give the financial institutions that wanted to merge the legislative argument that “Yes, it is true, the foreign banks are on the way here”.

If one goes out and asks people in the street, they will say “We are fine now. Those big bad banks did not merge, so we will be protected. I'll still have my local branch. I'll still have my teller; service charges won't go up too much; I won't have to deal with that darned banking machine too often”. That is what they think, but that is not what is going to happen.

If there is an agreement, what we need in this country is not subsidiaries, but actual branches. There is a $150,000 investment, and some people see this as positive, as an element of protection. The only ones that will benefit from competitive service will be the people who are better off. That is a pity, because it was one of the arguments used by the Reform Party.

They also said that the $150,000 figure was negative, since it deprived all Canadians financial consumers, all Canadians wishing to save money, of any entitlement to more competition.

Unfortunately, we do not have the overall picture. The MacKay report was good, because it did provide the overall picture. But who has read the report among those who use their bank cards daily or go to the bank every Thursday to deposit their pay cheques? No one. The only thing that is remembered from the MacKay report is that it was against bank mergers. But it did not end there. It was much more than that.

It was a wake-up call about what we can expect from the banking industry at the international level, but the issue was not addressed in the House. We will miss the boat.

I mentioned the MacKay report. Bill C-67 only provides that foreign banks have to open branches, instead of subsidiaries. There is no one on the face of this earth who can make any sense out of this bill.

What it means is that, first of all, the financial environment will make it easier for foreign banks to set up shop in this country. Second, branches will close, jobs will be lost, services charges will go up and services will be reduced in rural areas.

The new legislation will come into force and people will say “We have a problem. One option is to reduce the minimum $150,000 loans.” Foreign banks will be brought down to the level of other banks, to the level of branches, not subsidiaries, just branches. Watch out for what will happen during the next two years.

At that point the foreign banks will do their lobbying. Financial institutions, including the caisses populaires in Quebec—do not be surprised of they make agreements; they have already done so, but the Mouvement Desjardins will be reaching agreements with others in order to meet the competition—will be amalgamating and entering into service agreements more and more.

Then there will be a problem in the regions and with the SMBs. BDC reports will prove there are financing problems for SMBs. The government will be running around trying to put out as many fires as possible. They will not be prepared for the inevitable, that is, international competition within a country. That is today's reality—international competition within a country. That is today's financial reality, and we have to live with it.

Credit is even harder for people to obtain, and yet banks will not be amalgamating. There is nothing. People earning a lower or middle income have a lot harder time borrowing today than five or ten years ago. And yet the interest rates are low.

Look at consumer protection groups. Look at what is happening in Quebec with the difficulty in borrowing. The guarantees they want are incredible. In the past, they wanted your shirt; now they want your pants, your underwear, your socks and those of your parents and your uncles. That is what they want when you borrow these days. Why? Because the banks and the caisses populaires in Quebec cleaned out their financial portfolios.

Financial institutions have financial ratings for borrowers like you and me. Mr. Speaker, I know yours is excellent. A bank may, for example, have a rating between 1 and 9. One is the best rating and it is yours, Mr. Speaker. A Reformer would probably get a rating of nine. Why? Because that party is almost at the end of its political life. We do not know what rating the Conservatives would get.

[World Trade Organization, March 19th, 1999]

Mr. Speaker, my question is for the Minister for International Trade.

On November 25, a special panel was set up at the WTO to decide on France's rejection of asbestos. However, the members of this famous panel have yet to appointed, because the two countries cannot agree. Under WTO provisions, if, after 20 days, there is no agreement, one of the countries can ask the director general of the WTO to appoint people to this special panel.

The panel has not sat. Is the Government of Canada today in the process of asking the WTO director general to appoint the members of this special panel in order to reach a decision?

[Nuclear Challenge, March 11th, 1999]

Mr. Speaker, last December, the foreign affairs standing committee tabled a report on Canada and the nuclear challenge. We are still waiting for the government to state its official position on that here in the House.

However, we read in the newspapers that the government seems to have a position on this issue, which it refuses to share with parliamentarians.

And there is more. The government is sending invitations to groups that share its position, which has not even been announced, and is forgetting the other side of the coin.

The consultation process is over. The government should stop inviting groups just because they share its views. If it wants the committee to continue to hear groups on the nuclear challenge, it must invite groups representing both sides of the issue. It is a matter of safety and credibility.

[Federal-Provincial Fiscal Arrangements Act, March 9th, 1999]

Mr. Speaker, I agree with 99% of my NDP colleague's remarks.

The Reform Party said it wanted to give greater autonomy to Quebec, but that is not the point. The only way Reform would have a mathematical, theoretical or even political hope of forming a government is if Quebec did not exist, if there were no francophones, including Acadians. The Reform style is to divide and conquer. It is Machiavellian. It is cynical.

The hon. member's party and our own share the representation in the maritimes. They are the access for the development of this country and will surely not be the exit for the Reform Party.

[Federal-Provincial Fiscal Arrangements Act, March 9th, 1999]

Mr. Speaker, at the beginning of the hon. member's speech I was surprised, extremely surprised, very pleased even, to see that a Reform member was showing an interest in Quebec. This was a surprise.

By the end, however, I had seen through his question to the cynicism that lay behind it. In fact, I find the way he presented it somewhat patronizing.

It is as if Quebec were not entitled to its share in this country. I would remind hon. members that Alberta once received equalization payments. According to the Reform's principle, the provinces are equal when that suits them, and unequal when it does not.

Quebec is entitled to the same treatment as all other provinces in this country, no more and no less. Like any other province in this country, moreover, Manitoba, Newfoundland, or whatever, it is entitled to respect.

The problem with Reformers is that, every time there is a minority somewhere, a province or group that is different from them, or what have you, they start saying “It's not right; they are getting preferential treatment”.

Quebec is taking its proper place, and may it be given the freedom to do so. Quebec, francophones, minorities, will most certainly not be able to take their proper place with the Reform Party, but thank goodness, that will never happen. Thank goodness, the Reform Party will never be in power.

This country is blessed. Proof of that blessing is that, in the next election, the Reform Party is likely to have far fewer seats than it does today. Quebec will take its place in an atmosphere of respect, and not of cynicism, particularly from the Reform Party.

[Federal-Provincial Fiscal Arrangements Act, March 9th, 1999]

Mr. Speaker, it is nice to see the Progressive Conservative Party knows how the House operates. We have introduced motions here to try to improve Bill C-65, while the Reform Party has been saying this morning that they would have liked to but did not know quite how, they did not have the time and they sort of got sidetracked in the procedure.

We manage to do it and it makes for a good debate so that people understand what C-65 is really all about. So we are proud to do it.

What must be remembered in the motion we put forward is that we are attempting to improve Bill C-65 quickly. A Reform member was saying that it might be too late, but we were talking about the committee of the whole House, not a committee outside this chamber. It is the committee of the whole where we can assure all the provinces, including Newfoundland, Nova Scotia and Quebec that—in the last part of the motion, it is mentioned—should there be some extra money, they will not be penalized by the equalization payments immediately, but they will be able to spread it out.

That is what we talked about in committee. There was a discussion of spreading it over five years. Various formulae were discussed. Unfortunately, that is not in Bill C-65.

My colleague from Kings—Hants provided an example to help understand it. The analogy I will now make may not work perfectly, but it will allow members to understand what I am geeting at.

If we do not pass the motion moved by my colleague, the member for Kings—Hants, the provinces will find themselves in a situation something like that of a single parent family on welfare. A job means the immediate loss of the so-called benefits of the social assistance system, such as drug and dental plans, rent to income accommodation, and so forth.

We now know that several provinces, including Quebec, have decided to lessen this impact. We would have liked to see Bill C-65 take the same approach so that a province that put a lot of energy, and often a lot of money, into developing its primary and natural resources would not immediately be penalized. We would have liked Bill C-65 to take a much more logical approach with respect to what could happen in provinces now facing more of an uphill battle than others but wanting to do better.

I hope that all members will support this motion, especially our Reform Party friends who, having been unable to come up with good amendments for the provinces, can turn to us.

Bill C-65 talks about equalization. When I was younger, I viewed equalization as a Robin Hood situation, where the government took from the rich and gave to the poor. This is the simple explanation of a system that unfortunately can have its negative side, as C. D. Howe pointed out. That gentleman wrote an article in which he said that Canada's equalization system consisted of taxing low income Canadians in the have provinces to cover part of the cost of transfer payments to high income residents in the have not provinces.

One must be very cautious about examples referring to Robin Hood or C. D. Howe, for fear of running down a system that does, when all is said and done, work well. Even our friends in the Bloc Quebecois have said so on a number of occasions. In fact, their silence today is probably an indication of this.

According to the C. D. Howe example, a poor family in a rich province is likely to have access to assistance from that province, because it has the means. Care must therefore be taken not to criticize a system that works rather well, when all is said and done.

The equalization payment system has been in place since 1957. It is an unconditional transfer to the provinces, one with which the provinces are generally in agreement. Some provinces even have their own equalization system because there are not only national disparities, but also provincial, regional and local disparities.

For example, for several decades Quebec had an equalization system based on the federal system, as far as its philosophy and calculations go. It used an overall taxation rate, based on a standardized municipal property value, and thus enabled the province to help the least advantaged to get through some hard times.

This changed in 1979. Today, the program scarcely exists any more in Quebec; nevertheless, the philosophy of richer regions helping poorer regions works very well.

I have never heard it said in Quebec that a poor family in a rich region was providing help for a rich family in a poor region. To say so about a system that works very well is pure demagoguery.

Hopefully, Bill C-65 can be improved to help the poorest regions and bring hope to the poorest people. As I said earlier, the amendment moved by my colleague will be a tax incentive to regions starting to make a go of it, without penalizing them.

It is wonderful to see all members in agreement. This morning, I listened to the Reform Party finance critic, who spoke at great length but did not actually say anything useful. He said that they would do things differently. More than once, he commented on how it did not make sense for three provinces to pay for the other seven. He thought it should be five or six paying for three or four.

How is this any different? This is not how the equalization system works. But, according to the Reform Party, it is because things are going well for them in two of the three richest provinces, and they would like to do well in the third. It is not by getting a greater number of provinces to pay for a smaller number that the Reform Party will increase its chances of winning the next election. They are busy creating a new party and trying to come up with a good platform for the next election. We know this will not fly.

The equalization system must continue to improve. That is why the legislation is reviewed every five years. That is why the federal and provincial governments are in constant contact, to monitor the situation on an ongoing basis so that every five years action can be taken to smooth out inequalities in the process.

From three or four criteria in the late 1950s, we now have more than thirty today. This may be complex, but the tax base has broadened and changed, and new tax methods have been introduced.

The leader of the Reform Party said in his speech that he did not understand, that Canadians did not understand. It may not be just equalization payments they do not understand. They perhaps do not understand their tax return either, and that is why there are accountants. The Reform Party does not understand and that is why it is dropping in the polls. The fact that some folks do not understand does not mean that what they do not understand is not good for others.

The tax base has changed, it is better. And that is why we went from three or four items to 30. We hope it is not to complicate things, but to be fairer and more equitable.

For example, 10 or 20 years ago, there were no casinos. Revenues from casinos were not taken into account. Why? Because there were no casinos in Canada. There were community bingo halls, but no casinos. Now revenues from lotteries and games are taken into account in the analysis of equalization payments. Has it made the system more complex? No, I think it is an element to be taken into consideration. Not including it would penalize the regions.

This is why they think there is a change, but the change must be toward really helping, ensuring that equalization payments are at the heart of a country, and of a province and a region. They must serve the purpose for which they were initially intended—to help the people.

We must make sure that, in the regions, in spite of their difficulties and differences, people can enjoy basic services, framework and support equivalent to that of others in this country.

The same thing is done provincially. Quebec did it for decades. It is understandable. It is a principle. We could call it not the Robin Hood of Canadian taxes, but simply charitable, logical.

We are here to make sure that people have excellent services at reasonable cost throughout the country.