DISSENTING OPINION OF THE REFORM PARTY
October 29, 1996
The Reform considers the Liberal Report to contain an accurate and fair representation of the testimony presented by witnesses. We make two comments concerning testimony heard and recommendations contained in the Report.
Foreign Bank Entry Regime
We support strongly the recommendations made by financial institutions analysed in the Report section entitled "Foreign Bank Entry Regime - (I) Overall Regulatory Regime". At stake is a regulation proposed in the White Paper which would force financial institutions owned by foreign banks to become part of a Schedule 2 Bank in Canada, even if these institutions do not engage in deposit-taking or other bank retail business.
We agree with the witnesses that this regulation would be very costly for these financial institutions and that it might deter some from doing business in Canada. If this were to happen, consumers would suffer. We also agree with the witnesses who argued that their business does not present a systemic risk and that therefore the Canadian economy would reap few if any benefits from the enactment of this regulation.
The Establishment of a Consumer Protection Bureau
Reform disagrees with the recommendation contained in the Report that a Consumer Protection Bureau be established and made to report to the Minister of Industry. Its task would be to deal with public complaints about customer privacy in the financial sector. The establishment of such a Bureau indulges the Liberal tendency of enacting more and more regulation, which is costly and reduces freedom without commensurate benefits to the public.
We did not find persuasive the testimony of Privacy Commissioner Bruce Phillips and the Consumers Association of Canada that the need for such a Bureau exists. We agree with witnesses from the financial sector who argued that an industry code of conduct has worked well, that no serious violations of customer privacy have been reported and that the financial industry was prepared to change the code if unforeseen circumstances should arise.
We believe that the establishment of such a Bureau would impose significant costs of operation and compliance, which cannot be justified by expected gains. We therefore see no need to establish such a bureau now. However, since these matters are surrounded by some degree of uncertainty, we recommend that the establishment of such a Bureau be subjected to a careful benefit/cost analysis as part of the broader review of the financial system.
| Herb Grubel, MP
Finance Critic
|
Monte Solberg, MP
Deputy Finance Critic
|