Mr. Speaker, I am pleased to speak to Bill S-5, the financial system review act, at third reading.
As members are aware, the recent financial crisis tested the skills of many: policy-makers, regulators, bankers and investors. However, it also served to demonstrate the overall soundness of our financial system.
It was no accident that Canada escaped the worst of the global financial crisis with no bank failures or forced bailouts by taxpayers. Our legislative framework was built to withstand such shocks with high prudential standards, excellent regulation supervision, a flexible monetary system and good mechanisms to ensure financial stability.
However, when faced with such unprecedented market volatility in 2008-09, our government went further by acting quickly to improve this excellent framework, boost financial stability and ensure access to credit during a liquidity crunch.
Bill S-5 will build on the existing strengths of Canada's financial system and fine-tune a framework that has proven to be both efficient and effective. In the words of Canadian Life and Health Insurance Association Inc., Bill S-5 represents a welcome fine-tuning of the various financial institution statutes.
How will Bill S-5 achieve this? The bill will improve the ability of regulators to share information efficiently with their international counterparts. This will help fulfill our G8 commitments at a time when financial institutions increasingly operate on a global scale. It will ensure effective supervision and regulation across the borders.
Bill S-5 also proposes to improve the consumer protection framework, including enhancing the supervisory powers of the Financial Consumer Agency of Canada, FCAC, and increasing the maximum fine that would be levelled by the FCAC for the violation of a consumer provision of its act to make it consistent with administrative monetary penalties levied by other regulatory agencies.
The FCAC is mandated with ensuring that the federally regulated financial institutions adhere to the consumer provisions of the legislation governing financial institutions and their public commitments.
The FCAC is also the government's lead agency on financial education and literacy, and has moved forward with an array of excellent incentives in recent years. The agency has developed innovative tools to help Canadians, such as a mortgage calculator that quickly determines mortgage payments and the potential savings resulting from early payments. It has also created innovative online information to help consumers shop for the most suitable credit card and banking packages for their needs.
Our government believes Canadian consumers deserve accessible and effective financial services that meet the needs of consumers and operate in the public interest. That is why in budget 2010 we announced we would take action to prohibit negative option billing and require timelier access to funds.
The regulations will come into force this August and will require federally regulated financial institutions to obtain consumers' express consent before providing a new optional product or service. This will allow Canadians to receive all required information on the optional product or service to help them make the financial decisions that are best for their circumstances.
The regulations will also reduce the maximum cheque hold period for retail depositors and small and medium size businesses, and will provide retail depositors faster access to the first $100 deposited by cheque. Shorter cheque hold periods and faster access to funds will benefit Canadians by enabling them to manage their personal finances more effectively. After all, well-served and confident consumers contribute to the well-functioning financial markets and the economy.
Indeed, in the words of a recent Globe and Mail editorial:
Of the many things that frustrate the retail customers of Canada's federally regulated banks, one of the most egregious has been the practice of putting a hold of as many as seven days on deposited cheques. Now, thanks to new measures recently...announced...that upsetting practice and others are coming to an end.
[T]he government has shown a commitment to its promise to improve banking regulations in Canadians' favour. This is welcome news.
Similarly, in 2009, as part of the measures to improve access to financing, the government announced that it would bring forward measures to help consumers of financial products, including launching a task force on financial literacy.
The task force on financial literacy was mandated to provide advice and recommendations to the Minister of Finance on a national strategy to strengthen the financial literacy of Canadians. In support of the recommendations of the task force on financial literacy and delivering on a commitment from budget 2011, the government introduced Bill C-28, the financial literacy leader act. Bill C-28, a piece of legislation which I urge all members of the House to support, would provide for the appointment of a financial literacy leader who would collaborate and coordinate with stakeholders to strengthen the financial literacy of Canadians.
Canada's national strategy on financial literacy will support the excellent efforts under way throughout the country and empower Canadians to act knowledgeably and with confidence in managing their personal financial affairs.
I would be remiss if I closed without quickly reviewing other important initiatives in Bill S-5. They include: updating financial institutions legislation to promote financial stability and ensure Canada's financial institutions continue to operate in a competitive, effective and stable environment; improving efficiency by reducing the administrative burden on financial institutions and adding regulatory flexibility; promoting competition and innovation by enabling co-operative credit associations to provide technology service to a broader market; and reducing the administrative burden for federally regulated insurance companies offering adjustable policies in foreign jurisdictions by removing duplicative disclosure requirements.
In summary, the financial system review act provides for a framework that will benefit all participants in the financial sector, financial institutions as well as all Canadians. It maintains the long-standing practice of ensuring regular reviews of the regulatory framework for financial institutions, a unique practice that sets Canada apart from almost every other country in the world.
In fact, U.K. Prime Minister David Cameron said it best:
In the last few years, Canada has got every major decision right. Look at the facts. Not a single Canadian bank fell or faltered during the global banking crisis.
He went on to say that our economic leadership has helped the Canadian economy to weather the global storms far better than many of our international competitors.
Clearly, this government recognizes that it must continually consider what regulatory changes are needed to ensure that the fundamentals of the Canadian economy remain sound, that consumers are well protected, and that Canada continues to be an attractive place to do business in today's competitive global economy. This is precisely what the government has done with this bill.
On that note, I urge members of the opposition to stand up and support the swift passage of Bill S-5. To vote against the bill would not just be a vote against the Canadian economy, but a vote against the Canadian consumer.
