Madam Speaker, I would like to inform you that I will be sharing my speaking time with the member for Brossard—La Prairie.
Mr. Hollande, who is the Socialist Party candidate in the next French election, said that his enemy was faceless; that enemy would never be a candidate, was not a member of a political party and had no political platform, but nevertheless was in control. He was talking about the financial sector.
At present, this bill certainly reflects his words. Here we have a bill that is remarkable not for what it says, but for what it does not say and what it does not do. It should be protecting the Canadian economy; it should be protecting Canadians; it should be protecting the economic aspirations of the Canadian public; but it does not do that. It is utterly and completely silent on that.
There is probably good reason why this bill was introduced in the Senate. The bill was introduced to do nothing. It was introduced in haste. It contains only technical points and items that are hardly essential to the growth of the Canadian economy.
It does not talk about supporting industrial capital and investment in job creation, which our financial sector could be ordered to do. No, that is not what it talks about; it speaks only about purely technical items. We will see, later, that these technical items are essentially going to allow the financial sector to do more of the same: more money and more bonuses, but certainly no more services for the Canadian economy.
We have been talking about service charges and use of the banking sector for a long time, and this relates directly to the Bank Act. Those charges are excessive. They mean that consumers are not just the people who supply the banks with the money so they can lend it out again, but also the customers who have to pay truly excessive charges to use their own money. They have enabled the banking system to increase its profits to the $25 billion point, an impressive number indeed.
At the same time, the financial sector’s budget for bonuses has climbed to $9 billion. That was the fastest-growing item in the financial sector. As in the United States, France and England, the financial sector is motivated by bonuses, and in that sector the board members have little to gain by defending the interests of the shareholders, their customers and the economy of their country. They are motivated solely by bonuses. In this regard, just like all the other laws in the other countries, the government of Canada is modelling its approach directly on the worst elements of the banking laws of the other countries. We could talk about excessive credit card interest rates. That is something that is directly connected with too many bankruptcies experienced by Canadians. They are not talking about that. They do not want to talk about it. There are a lot more things missing as well.
Let us talk about the waiting time that allows banking institutions to hold a cheque for a certain number of days. People deposit their cheques and cannot withdraw their money immediately. That means that an entire parallel service is created: a new financial sector, the cheque-depositing sector, where the cheque is paid out immediately in return for a charge that may range from 5% to 20%. But that is not a problem. We will not talk about that.
Nor is a compensation fund for victims of fraud being created by players in the financial industry, something that is considerably more serious. People are told to go ahead: the financial sector is safe and is there for them, but if it does not work out, no one will be there to support them anymore.
There will be no one to reimburse them and protect them, but in exchange, they will be allowed easier access to financial literacy. That was very useful to Nortel's shareholders and the people who invested in Norbourg, when those two companies were praised to the skies by the financial world. There were countless articles in the economic press praising the management of those two companies and encouraging Canadians to participate actively in financing them. And yet once again they decide it is not necessary to protect consumers and investors.
Even investors now have to take on the task of managing their own RRSPs. They alone will be responsible for losses in their RRSPs. That is impressive. Obviously, we are going to use the time for examining this bill in the Standing Committee on Finance to give it a few more teeth. In spite of the short time the government is giving us, we will be fighting hard to make this bill better suited to defending the interests of modern Canada.
The bill talks about foreign acquisitions, an important point, particularly in Canada; we have been visited by the Union de banques suisses, the UBS. We could call them “itinerant bankers” or carpetbaggers. These people represent a foreign financial institution— the UBS—and they send people to meet with the wealthiest Canadians and ask them to invest in their discreet, secret, numbered bank accounts and they will not have to pay Canadian income taxes. That is marvellous. And that is what they have done. The problem is that it is not really legal. It is called tax evasion. It is flat out illegal. And yet no lasting changes are being made to Canada’s Bank Act to prevent activities like that.
There should be a power of life or death over a Canadian institution owned by foreign entities, to prohibit it from ever doing anything inside Canada. They could be much more stringent, and yet they are not. They are raising the ceiling on shareholder equity. They already raised it in 2007. At the time, it was $5 billion. Now we are told it has to be $12 billion. This is an opening for what is called leverage. It is going to be much easier to make speculative investments. That is the most obvious opening for speculation in the financial sector.
In other words, this bill is not an instrument to strengthen the regulatory framework that protects Canada, as it did in the last recession. The entire financial sector was unscathed. What we are really looking at is deregulation of all the intervening new economic factors. They are regulating only the old financial sector. The new one can do as it wishes.
On that last point, there is an important item to note: pooled registered pension plans, this government’s most recent invention. These plans will allow financial institutions to take money. All the Canadian workers who contribute to the plans will know exactly how much they will pay every week—$25 or $50 or $60—but they will never know exactly how much they will get when they retire. This is what is called a defined contribution plan. However, people will not know what their benefit rate will be when they reach the age of 65—or 67—depending on the whim of the people opposite. That will be largely determined by the management fees. That is why it is important to talk about this and to regulate this sector.
