Finance committee  Yes, it would.

Finance committee  The Financial Consumer Agency of Canada is the dedicated federal regulator charged with ensuring compliance with all of the consumer provisions that are included, both in the existing provisions of the act and in the new provisions. However, the FCAC works closely with the prudential regulator—OSFI, the Office of the Superintendent of Financial Institutions—and they work collaboratively on elements that may overlap.

Finance committee  Actually, it's a very good question. The provision was in regulation; now it is being put into legislation, just to confirm it. Perhaps Ms. Ryan wants to provide details.

Finance committee  Thank you, Mr. Chair. This is a large part of the act, so I had a rather lengthy statement. I will cut it down in the interests of time. I'm going to cover part 4, division 5 of Bill C-29, which includes proposed amendments to the Bank Act with respect to the federal financial consumer protection framework for banking, covering clauses 117 to 135 of the bill, on pages 179 to 226.

Finance committee  That is correct.

Finance committee  Far be it from me to qualify the minister's statements, but I think he reflected the sentiment that this is a provision that is designed to protect customers and depositors, hence that all deposits are excluded. It really is to keep the institutions operating. From a broad point of view, this is one measure we hope never to test, but it's adding one element to the tool kit of many tools that already exist under the CDIC Act.

Finance committee  That would be correct.

Finance committee  Yes, I would affirm that statement.

Finance committee  Yes. I have just one supplemental point, if I may. While this bill has been pre-reviewed in the other place in Parliament, I can say, not speaking for them, that the Canadian Bankers Association, representing all of the affected institutions, have come forward to suggest that we had consulted, and they were supportive of introducing this regime quite consistent with standards internationally.

Finance committee  I think you've nailed it in that sense. It's really about putting creditors as well as shareholders in the sequence of response ahead of the taxpayer in that scenario.

Finance committee  If I may, let me differentiate. If you were a customer of an institution and you had deposits or mutual fund RRSPs, from a portfolio point of view, none of your client's interfacing with the bank should be disrupted. It should not be disrupted. Your client's interface with that institution should be maintained: their accounts, their provisions, loans, mortgages, car loans, should continue seamlessly.

Finance committee  May I respond, Mr. Chair? Thank you for that. I agree. I just wanted to be clear in interpreting my last statement that this puts creditors and shareholders ahead of the taxpayer. Just to be clear, there is always contingent liability on the taxpayer where we backstop, in many ways, the financial system.

Finance committee  Actually, this is not an amendment. It's a provision that is actually in the current act that is not being amended, but we're happy to follow up to give you clarity on the “may” versus “shall.” Every time I ask that of my lawyers, I always get a lecture.

Finance committee  Yes, to a certain extent all prudential or supervisory authorities have very similar options when it comes to a private institution that reaches a point of non-viability. Of course, the circumstance under which that happened drives the outcome of what choice is taken: is it idiosyncratic, one institution, is it multiple, is it something outside your borders?

Finance committee  Correct. This is all about aligning the risk to the appropriate return and ensuring that incentives are aligned for prudent management.