Mr. Chair, I would be remiss if I did not start by responding to comments that were made in the House just before I rose to speak.
The hon. Parliamentary Secretary to the Minister of Finance talked about running a tight ship and not wanting to have big government. We know that if we take the 20 year period from 1981 to 2001 and compare political parties across the country, both provincially and federally, we find that the Liberal Party actually has the worst record of deficit financing. Eighty-five per cent of Liberal budgets were in deficit. They went into debt financing and into debt in a very big way.
There were also comments from the Conservative member opposite who represents a party that in the 1980s ran up the largest deficits in Canadian history.
Here we have Liberal and Conservative members pontificating on debt and responsibility when together those two parties have the worst possible records. It is appalling hypocrisy for those parties to talk about appropriate debt management when they have such appalling records.
Let us talk about the reality. The reality is that over the last 10 years the average Canadian family has seen their debt load rise by about one-third. The average Canadian worker has lost about 60¢ an hour in real terms. What we are seeing across the country is less and less resources for Canadian families, a social safety net that has been gutted and ripped apart by Liberal cutbacks while a surplus has been accumulated. At the same time Canadian families are trying to borrow money to make ends meet.
In my riding of Burnaby—New Westminster I knocked on over 6,000 doors during the last election campaign. What surprised me were the number of families that are just holding on, just keeping a roof over their heads. In my riding, which is not in any way exceptional compared to other ridings across the country, about one family in seven is spending 70% of their income on keeping a roof over their heads.
The reality after 10 years of Liberal government is we are seeing higher and higher debt loads for Canadians. We are seeing lower and lower salaries. We are seeing a loss of real wages. We are seeing higher debt. That is why this issue and this important debate is something that all members should take into consideration. We know that at the same time as Canadians are hurting, the banks are not hurting at all.
This year, the six largest banks in Canada recorded profits in excess of $13.3 billion. This is a record high, $2 billion more than last year's record of $11.11 billion.
While those record profits are being recorded, these same Canadian banks continue to increase their tax evasion tactics. The money involved ought to be going to improve the quality of life of Canadians, which we have seen deteriorate over the past 10 years.
For the past four years, $5.7 billion has escaped taxes by going into branches located in tax havens. Whereas the banks ought to have been paying some $12.1 billion in taxes, they paid $6 billion and another $5.7 billion went tax-free.
At the same time, Canadians credit card indebtedness continues to rise alarmingly. Since 2003, Canadians have owed their banks close to $50 billion in credit card balances.
This is a crisis, a crisis of debt load. The committee on credit card costs reported in March 1990. It recommended that interest charges on cards issued by financial institutions not be allowed to go higher than eight percentage points above the bank rate.
I will quote a Liberal member of Parliament, the member for Glengarry—Prescott—Russell. He said that an argument against an interest rate cap was “gibberish”. The minister “says on the one hand that competitive forces will work to keep interest down but if you impose a limit, the companies will all climb to that limit. That is highly contradictory”. He described the proposed cap “as the most important recommendation of this report. Without it the work of the committee is diminished significantly”. He also said that the government “has seen fit not to act on the cap and that is consistent in that this government has consistently defended the interests of big business”. That came not from a New Democrat MP but from a member of the Liberal caucus, quoted in the Toronto Star on March 29, 1990.
We have seen that both the Conservatives and the Liberals have refused in any way to bring interest rates under control. I will come back to what the NDP proposes.
During the last election campaign, the NDP promoted a consumers' bill of rights that would protect Canadian families by regulating credit card interest rates to five points above the prime lending rate as opposed to the 10 to 20 point gap that so many credit cards have.
The pocketbook protector also spoke of requiring chartered banks to maintain, rather than abandon, branches in Canada's rural and small towns as well as in poor inner city neighbourhoods.
We know that the banking industry that is reaping record profits beyond what anyone could imagine, more than $13 billion, at the same time has closed more than 700 branches across the country. This means that not only are Canadians having to go to higher interest rate credit cards to try to make ends meet, but they also going to many of the cheque cashing companies. The cheque cashing companies, which are moving into poor neighbourhoods, sometimes include exorbitant fees, insurance charges, et cetera, that are more than 60%. In other words, the cheque cashing companies in many cases are exceeding the Criminal Code limit.
That is what we spoke about in the election campaign. It had a resonance certainly in my riding. I knocked on 6,000 doors. People were very concerned about credit card debt, about paying too much in interest, about having to make tough choices at the same time as they see these record bank profits.
I am happy to see that Senator Plamondon has introduced in the Senate, and hopefully we will see similar legislation coming to the House, an act to amend the Criminal Code to reduce those usurious rates of interest that are still legal in the country.
There are reactions. As I mentioned, there is Bill S-19 from Senator Madeleine Plamondon. There are also Canadians who have undertaken class actions on behalf of individuals who have been charged interest when they should not have been.
One of the latest class action lawsuits concerns the charging of interest on an unpaid bill. In other words the banks are charging interest on credit cards the moment the purchase is made, even if they have not reimbursed the merchant for a period after that. The lawsuit alleges that by charging interest on an unpaid bill from the transaction date, the banks are violating a number of laws, including the Consumer Protection Act, the Trade Practices Act and the Interest Act. All of these are important. It indicates that consumers across the country are now fighting back. They are fighting back because they are concerned about the impact of high interest rates, the impact of these horrible practices which mean that Canadian consumers get gouged while the banks make record profits.
In the few seconds remaining I would like to mention two things. I would like to underline the work of my colleague from Windsor West who has done a wonderful job in raising the issue and the impact of the U.S. patriot act on Canadian credit cards and Canadian credit card data. He has raised the issue a number of times and continues to work very hard on that issue. I congratulate him on his good work.
I would also like to underline the work of the Credit Counselling Society of British Columbia which is in my riding. It is a New Westminster based non-profit organization that teaches money management skills and helps people solve financial problems through counselling and debt restructuring.
The issue of credit cards, excessive interest rates, usurious practices in the cheque cashing industry and improper practices that gouge Canadian consumers are all ones which members of my party certainly take to heart. We will continue the fight on these issues in Parliament.
