[Recorded by Electronic Apparatus]
Wednesday, December 13, 1995
.1533 
[English]
The Chair: The finance committee is beginning second reading hearings on Bill C-100.
We have with us a person of great renown, great acumen, great seriousness, and great probity, who we respect greatly and who always listens to the chair, the hon. parliamentary secretary, David Walker.
Mr. Walker, would you be good enough to introduce those who are with you?
Mr. David Walker (Parliamentary Secretary to the Minister of Finance): Yes, I will,Mr. Chairman. Thank you for the opportunity to be here.
With me from the Department of Finance are Nick Le Pan, special adviser; Rhoda Attwood, counsel; and Doug Wyatt, senior counsel, who has been here before.
Mr. Chairman, the purpose of today's session is to do clause-by-clause for Bill C-100, which covers several pieces of legislation affecting the insurance industry. I won't bother with opening remarks.
As you know, Mr. Chairman, during the summer we met with several witnesses, and as a result of those meetings, the department has come forward with a number of amendments. It is my understanding that all members of the committee have had an opportunity to be briefed by the department and have been offered any assistance they wish and that today's session is to approve these amendments, if we can. If there are amendments that members do not feel they fully understand, the witnesses are here to answer questions as fully as possible. These areas are somewhat complicated; I wouldn't say arcane, but you might think that. I want members to feel they have opportunities to raise questions and that this is not just being passed too quickly for their consideration.
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So, Mr. Chairman, I'm at your disposal for dealing with it. On how you want the amendments and the motions introduced, I'm at the disposal of the committee. If there are particular areas they'd like to flag right now, we could organize our work around that.
[Translation]
The Chair: Mr. Loubier, have you any questions or suggestions pertaining to the amendments?
Mr. Loubier (Saint-Hyacinthe - Bagot): Mr. Chairman, I read this bill carefully this summer, in June, and I read it again in August, when we appeared before the Committee. Over the past two days, I have been carefully reading the proposed series of amendments and I must say that the amendments are almost as long as the bill itself. I came to the conclusion that the amendments failed to reflect any viewpoints I had raised in August. If you wish, I would be happy to discuss the three points of this bill that troubled the Official Opposition, because we intend to vote against all of these clauses and against the entire bill.
The Chair: Thank you, Mr. Loubier.
[English]
Mr. Grubel, do you wish to make any comments before we go into this?
Mr. Grubel (Capilano - Howe Sound): Yes, Mr. Chairman, thank you very much.
I would like to express my appreciation for the technically superb briefing that was given to me and my party on this bill. I agree with the technical amendments that have been made and also with those of some substance. They were explained to me very well, and I can see they would improve the bill.
However, if I may just take a minute to explain, the Reform Party still opposes the bill as a whole. I would therefore go along with acceptance and vote in favour of the amendments, but I would still vote against the bill in the end. The basic reason is that we believe problems of prudential regulation, as approached in this bill - namely that bureaucrats are best suited to do that on the basis of regulation - are philosophically opposed to the idea that we should leave more of it to the market.
It could have been left more to the market if there had in fact been co-insurance and deductibles on all kinds of insurance, especially for those with higher levels of deposits - not the small ones, because we cannot expect ordinary Canadians to keep up to date. That would have generated, in turn, market institutions that would then have played a watchdog role that bureaucrats are now expected to take. Philosophically and, I believe, on the basis of empirical evidence around the world, the ability of bureaucrats to handle those issues is inferior to that of markets. I therefore beg to disagree with the approach used in this bill and my party has decided to oppose it.
Thank you for the opportunity to put these words on record.
The Chair: Would you adhere to that position even if I could show you two or three bureaucrats who are better than any market?
Mr. Grubel: Yes, they are better, but do they have the right incentives?
The Chair: Thank you, Mr. Grubel.
[Translation]
Mr. Loubier, you may give us your point of view.
Mr. Loubier: This will take only a few minutes, Mr. Chairman.
I must confess that this is the first time we have ever dealt with such a technical bill, but we proceeded to study it all the same.
The same thing for the amendments. Although Mr. Walker responded to my request in the most satisfactory manner, I would like to say that we had to examine fifty odd pages of amendments in two days and we found that we did not have enough time to analyze a bill of this nature. Nevertheless, I will provide you with my comments on Bill C-100 one last time.
The Official Opposition reserves the right to table its own amendments when the bill is at report stage.
.1540
In short, our criticism focuses on three points. Our first objection which was not remedied whatsoever in the amendments, pertains to the fact that the Bank of Canada, using the pretext of an exacerbated systemic risk, is given the power to direct not only the Houses but also the institutions working in the securities sector.
Mr. Walker had asked me to pay particular attention to the amendments proposed in the section on clearing Houses and regulations, because he thought that this section would be of interest to us. Even with this amendment, which puts more limitations on the Bank of Canada power to direct by removing it from sectors where it no longer has jurisdiction, it still has the authority to give opinion and to issue directives in sectors already governed by the provincial securities commissions, particularly the Quebec Commission. Therefore this point which we raised has not been rectified by the amendments and remains in the bill. Therefore this issue was not remedied by the amendments and remains in the bill.
The second area of concern pertains to clause 133, which broadens the concept of insolvency, insolvency being a matter that comes under federal jurisdiction exclusively. However, in so doing, you have disregarded the role played by the inspecteur général des institutions financières du Québec as well as the role played by the Ontario Inspector General. Once again, we feel that this is duplication, there is overlap, duplication here. And yet the purpose of the bill is to reduce interventions and to make them more effective. This is what you've always claimed that the bill is about and yet we see no evidence of this either in the content of Bill C-100 or in the proposed amendments.
Similarly, the amendments do not contain anything to the third concern we raised. This concern pertains to clause 21, on page 11 of the bill, where it states that the Canada Deposit Insurance Corporation shall establish premiums based on the risk for deposit made in Canada. I will use Desjardins as an example. Five per cent of its deposits are made outside Quebec. The premium rate set for this company could have an impact on 95% of the deposits made in Quebec, where is only 5% of its deposits are made outside Quebec.
Mr. Chairman, I will stop there. I will be voting against the entire bill and against the amendments. We intend to present, at report stage, amendments that could alleviate three concerns that we have.
The Chairman: Before we begin the clause-by-clause study of the bill, do you have any comments that you wish to make, Mr. Walker.
[English]
Mr. Walker: I'll answer just very briefly, and I'll elaborate on it at report stage for the record, Mr. Chairman.
We had a number of conversations in the department and with the industry to deal with the issue raised by Mr. Loubier and by the Quebec minister of finance. There was an exchange of letters at the time and we feel the amendments go a long way to clarifying the jurisdictional issues raised by the Quebec government and at the same time maintaining the federal presence and the federal predominance in this area, which is a primary concern to the federal government.
The Chair: Thank you, Mr. Walker.
That having been said, I'd like to go clause-by-clause. I'm going to try to group them wherever possible to save time. We'll stop for each one where amendments are to be put in.
Clause 1 as amended agreed to on division
Clauses 2 to 4 inclusive agreed to on division
Clause 5 as amended agreed to on division
Clauses 6 to 11 inclusive agreed to on division
[Translation]
The Chairman: Mr. Loubier, you could move your amendments when we get to the appropriate clauses.
Mr. Loubier: No. The amendments made by the Official Opposition will be moved at the report stage.
The Chairman: Very well.
Mr. Loubier: They are ready, however.
The Chairman: Why not say "as amended"?
[English]
Clause 12 as amended agreed to on division
Clause 13 agreed to on division
Clause 14 as amended agreed to on division
.1545
Clauses 15 to 21 inclusive agreed to on division [See Minutes of Proceedings]
The Chairman: A new clause has been inserted between clauses 21 and 22.
Amendment agreed to on division [See Minutes of Proceedings]
Clauses 22 to 25 inclusive agreed to on division
Clause 26 agreed to on division [See Minutes of Proceedings]
Clause 27 agreed to on division
Clause 28 agreed to on division [See Minutes of Proceedings]
Clause 29 agreed to on division [See Minutes of Proceedings]
Clauses 30 to 33 inclusive agreed to on division
Clause 34 agreed to on division [See Minutes of Proceedings]
Clauses 35 to 40 inclusive agreed to on division
The Chair: I don't know why the hell I have to do this. I thought I could just go through it and say ``everything as amended agreed to on division''.
Clause 41 agreed to on division [See Minutes of Proceedings]
Clauses 42 to 45 inclusive agreed to on division
The Chair: A new clause.
Amendment agreed to on division [See Minutes of Proceedings]
Clauses 46 to 58 inclusive agreed to on division
Clause 59 agreed to on division [See Minutes of Proceedings]
Clause 60 agreed to on division [See Minutes of Proceedings]
Clauses 61 to 69 inclusive agreed to on division
Clause 70 agreed to on division [See Minutes of Proceedings]
Clause 71 as amended agreed to on division
The Chair: New clause.
Amendment agreed to [See Minutes of Proceedings]
Clause 72 agreed to on division
Clause 73 agreed to on division [See Minutes of Proceedings]
Clause 74 agreed to on division
The Chair: New clause.
Amendment agreed to on division [See Minutes of Proceedings]
Clause 75 agreed to on division
Clause 76 agreed to on division [See Minutes of Proceedings]
Clause 77 agreed to on division
The Chair: New clause.
Amendment agreed to on division [See Minutes of Proceedings]
Clauses 78 to 83 inclusive agreed to on division
The Chair: New clause.
Amendment agreed to on division [See Minutes of Proceedings]
Clauses 84 to 86 inclusive agreed to on division
Clause 87 agreed to on division [See Minutes of Proceedings]
Clause 88 agreed to on division
The Chair: New clause.
Amendment agreed to [See Minutes of Proceedings]
Clause 89 agreed to on division
Clause 90 agreed to on division [See Minutes of Proceedings]
Clauses 91 and 92 agreed to on division
Clause 93 agreed to on division [See Minutes of Proceedings]
Clause 94 agreed to on division
Clause 95 agreed to on division [See Minutes of Proceedings]
Clauses 96 to 109 inclusive agreed to on division
Clause 110 agreed to on division [See Minutes of Proceedings]
The Chair: This is the best speech I've ever given in my life.
Clauses 111 to 114 inclusive agreed to on division
Clause 115 as amended agreed to on division
Clause 116 agreed to on division
Clause 117 as amended agreed to on division
Clauses 118 to 123 inclusive agreed to on division
Clause 124 as amended agreed to on division
Clause 125 agreed to on division
Clause 126 agreed to on division [See Minutes of Proceedings]
The Chair: We have a whole string of them here, just like the number of games lost by the Leafs.
Clauses 127 to 150 inclusive agreed to on division
Clause 151 as amended agreed to on division
Clauses 152 to 156 inclusive agreed to on division
Clause 157 as amended agreed to on division
Clauses 158 to 160 inclusive agreed to on division
Clause 161 agreed to on division [See Minutes of Proceedings]
Clauses 162 to 172 inclusive agreed to on division
Clause 1 of the schedule agreed to on division [See Minutes of Proceedings]
Clause 2 of the schedule as amended agreed to on division
Clause 5 of the schedule as amended agreed to on division
Clauses 6 to 9 inclusive of the schedule agreed to on division [See Minutes of Proceedings]
Clause 12 of the schedule as amended agreed to
Clause 13 of the schedule agreed to [See Minutes of Proceedings]
Clause 14 of the schedule agreed to [See Minutes of Proceedings]
Clause 15 of the schedule as amended agreed to on division
Clause 18 of the schedule agreed to [See Minutes of Proceedings]
Clause 22 of the schedule agreed to [See Minutes of Proceedings]
The Chair: Shall the title carry?
Some hon. members: Agreed.
Some hon. members: On division.
The Chair: Shall the bill carry?
Some hon. members: Agreed.
Some hon. members: On division.
The Chair: Shall the committee reprint the bill for use at report stage? No?
The Clerk of the Committee: Can you go back to the complete schedule?
The Chair: Is the schedule as amended agreed to?
Schedule as amended agreed to
The Clerk: Thank you, sir. And the reprint.
The Chair: I know now why you didn't televise this. People would think we're crazy, right?
Some hon. members: Oh, oh!
The Chair: Shall the committee order a reprint for use at report stage?
Some hon. members: Agreed.
Some hon. members: On division.
The Clerk: No, not on division.
[Translation]
Mr. Loubier: I didn't understand because so much is being said.
The Chairman: If the bill is amended, should the committee request a reprint to be used at the report stage so that you will have a document on which you can base your criticisms?
Mr. Loubier: On the point of order, Mr. Chairman. We are in the process of doing something serious. Since the beginning of the summer I have spent many days with my team and two days this past week analyzing this bill and its amendments.
If we present criticisms, it is not done just the sake of doing so, but rather to inform you of our views. We are going to do this at the report stage, whether you like it or not.
The Chairman: Okay. However, what we are trying to determine is whether or not we should request a reprint to be used at the report stage.
[English]
On division?
Shall I report the bill to the House, as amended?
Some hon. members: Agreed.
Some hon. members: On division.
The Chair: I want to thank all members for their hard work on this bill. It's very technically complicated.
.1550
I also want to say to the parliamentary secretary, to the officials with whom we've worked and to the minister involved that I think the process has been an incredibly important innovation in the way we proceed.
The minister brought down a white paper and the industry responded. The minister brought down a bill and this committee held hearings this summer in which the industry responded.
These amendments are a result of all of us working in a collaborative way without having any egos involved. We were all working together to try to make the bill as perfect as we could.
In my long experience here on the Hill, this is one of the great examples of constructive collaboration and partnership among all parties involved, and I want to commend the members, the officials, the minister and particularly members of this committee from all parties for the work that has gone into making this better.
Mr. Grubel: And the public input.
The Chair: And the public input, of course. Thank you, Herb.
[Translation]
Yes.
Mr. Loubier: I have only three points to make. The first pertains to what Mr. Walker said earlier.
[English]
You talked about the discussion between the federal government and Quebec government officials.
[Translation]
I thought I understood that these discussions had not resulted in improvements that we wanted to make to Bill C-100.
As far as my second point is concerned, I would like to ask Mr. Le Pan. What will follow Bill C-100 with respect to the series of reforms to be made to Canadian financial institutions? How are we to articulate the types of reforms to be made between now and 1997? Have you got a general idea of what this will entail? Can you outline the reform in general? I could also put this question to the Secretary of State, Mr. Walker.
[English]
Mr. Nicholas Le Pan (Assistant Superintendent, Policy, Office of the Superintendent of Financial Institutions): The minister has indicated he intends to bring forward a paper perhaps in February or early spring.
I think it is too early to say exactly what topics that paper will cover, but some of it will involve changes to the legislation because there are parts that are fairly technical and don't work as well as we wanted them to in 1992.
It may be that there are some changes in business powers for different parts of the various sectors. There have been a lot of briefs by various parts of the sectors suggesting there ought to be further liberalization of business powers so that there are more opportunities for institutions to compete effectively.
There are issues that have been raised in the briefs that have been submitted in response to the minister's request around access to the payment system. That can mean a variety of things, and it's not clear how those issues will be on the table. So the process is a paper from the minister in the early part of the new year.
Then I'm sure the minister is expecting that various parliamentary committees will want to consider that, perhaps including this committee. I expect this committee would want to look at that paper and have some input.
The current legislation has a sunset clause for March 31, 1997, so following that paper, various committee hearings and parliamentary input, the timetable is to try to bring forward legislation as soon as possible after the publication of that paper in order to meet the sunset deadline for these statutes, legislation for the early part of March 1997.
Mr. Walker: Mr. Chairman, perhaps our steering committee should meet when we come back in February and decide how we want to respond to the white paper once we know the exact timetable for its publication, decide whether we want to have hearings, discuss it through you with other chairs of committees and set out our work plan then.
The Chair: We also have the possibility, if the white paper is not coming down soon enough, of starting pre-hearings on it, depending on what the interested parties in the financial community tell us.
.1555
[Translation]
Mr. Loubier: I have just one final point. I would like to wish all of the committee members, the support staff, the officials and their families a Merry Christmas and a Happy New Year. I would also like to say that, even if we do not always see eye-to-eye on policies, we are human beings and we have human relationships. I really appreciate working with you.
Some Hon. members: Bravo!
The Chairman: Thank you very much.
[English]
Could we just do one little bit of business? Because our mandate was extended until January 17, 1995, we have two people whose mandates have to be extended. One has not even been hired yet and the other has only done a couple of days' work. This is for the editor and the writer.
It was moved by Mrs. Stewart that the editor's contract and the writer's contract be extended until the date of tabling the final report. This will not involve a big expenditure because they haven't done anything yet to date. Do I have a seconder for this motion?
[Translation]
Mr. Loubier: How much does that mean?
The Chairman: A maximum of approximately $20,000 for both of them.
Mr. Loubier: Okay.
[English]
On division.
The Chair: On division?
[Translation]
Mr. Loubier: We haven't seen the content; we haven't seen the motion.
The Chairman: Okay, that's good.
[English]
Motion agreed to
The Chair: May I add to what Mr. Loubier has said?
As a committee, when we were in Calgary, staff informed me that we had held our 200th meeting, which did not include the meetings that had been held on the eastern leg of the journey or meetings we've held since we've been back.
This is incredible. I don't think any committee that I've heard of in the House of Commons has put in so much time and has worked so hard. This is a tremendous credit to members from all parties.
But the people who really deserve our thanks are our two researchers, Richard Domingue and Marion Wrobel, and our clerks, Pierre Rodrique - he is not with us, because he's ill, but he's an incredible clerk - and Martine Bresson. I would like to thank them and all those who worked on translation and making our rooms available and working the microphones. They have just looked after us so efficiently and quietly that we've been able to go about our work in a way that is quite unique. This has sort of spoiled us.
[Translation]
We would like to thank you and we too would like to wish you a Merry Christmas and a Happy New Year.
[English]
Thank you very much to all of you.
Mr. Grubel: I just want to know something about the procedure of the tabling of the report of the finance committee on the 17th. At what time will it be? Where does it take place? When do we have our opportunity to make a -
The Chair: I expect we will be tabling it with the Clerk of the House. So that won't be an official act in the House of Commons because it won't be sitting.
We will probably then have a press conference. We'll go first, followed by the official opposition, and then you, Herb. Your offices will be kept absolutely informed about it as to when it takes place. I don't know that there will be enough in it such that we'll even need a press conference, but I'll certainly let you know well in advance of our intentions.
Mr. Grubel: By when do we have to submit the minority report?
The Chair: I don't think we will have our majority report available for you to see until probably ten days before, at the earliest. You basically know what we're going to say. We've already supported -
Mr. Loubier: Have you set your date?
The Clerk: I would like ten working days.
[Translation]
The Chairman: We can give you something ahead of time, even if it isn't in the exact form, but as you can see, we are sticking to our target of 2%.
Mr. Loubier: If you don't give us t he means to reach this target, we will not have any influence.
The Chairman: Not for the time being, but I believe that you will find these means in our report. Obviously, we have not yet made any decisions because final testimonies were given only yesterday. Now is when the real work begins.
.1600
I can assure you, however, that I will provide you with this information as quickly as possible so that you can respond. You are aware that it won't be all that much this time around. It was more important the last time.
Mr. Loubier: Can you assure us that we will have the first draft of the report at least ten working days in advance?
The Chairman: Yes, as quickly as possible. You can contact the Clerk at any time to obtain a report on our general program.
[English]
Again, members, have a wonderful holiday, and thank you all so much. Thanks to our staff.
The meeting is adjourned.