FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, March 2, 1999

• 1539

[English]

The Vice-Chair (Mr. Nick Discepola (Vaudreuil—Soulanges, Lib.)): I now call this meeting to order.

[Translation]

In accordance with its mandate under Standing Order 108(2), the Committee resumes its study of the Report of the Task Force on the Future of the Canadian Financial Services Sector.

• 1540

I would like to welcome you. As you know, on December 10, the Standing Committee tabled its preliminary report in response to the various testimony heard up until that point. In addition, we made a commitment to continue the study and discussions this spring, something that we are doing today.

You may add what you already know, notwithstanding the decision made in December by the Minister of Finance with respect to bank mergers. The committee is focussing on the future of financial institutions and the financial services sector. Accordingly, I would ask that the discussion not deal exclusively with bank mergers.

• 1545

I would like to introduce our guests to the members of the committee. We have Mr. François Vaudreuil, President of the Centrale des syndicats démocratiques; Mr. Jacques St-Amant, an analyst with Option Consommateurs; Ms. Thérèse Hurteau-Farinas, of the Fédération des femmes du Québec; Ms. Marguerite Bourgeois, of the Front commun des personnes assistées sociales; Mr. Roger Lagacé, of the Association québécoise de défense des droits des personnes handicapées; Mr. Normand Guimond, union advisor; Ms. Daren Laine, of Project Genesis; and Mr. André Sénéchal, a member of the coalition.

Mr. Vaudreuil will make a presentation of approximately ten minutes and then the representatives from the various groups, as well as Mr. St-Amant, will have five minutes to speak. We will have a discussion period of about an hour for the members of the committee. If this is agreeable to you, we will begin without further ado with Mr. Vaudreuil. Welcome.

Mr. François Vaudreuil (President, Centrale des syndicats démocratiques, Coalition québécoise pour le maintien des emplois et services bancaires personnalisés): Mr. Chairman, I would first of all like to thank the Standing Committee on Finance for welcoming us here. However, we would have much preferred to have this afternoon meeting in Montreal. Other people from the Coalition could have joined us.

This afternoon, the Coalition québécoise pour le maintien des emplois et services bancaires personnalisés would like to discuss the three main issues of great concern to us. Our first objective is to ensure that everyone in Canada, without discrimination, has an opportunity to open a bank account.

Our second objective is to guarantee that every person in Canada has access to personalized banking services at a reasonable distance from his or her residence during adequate business hours.

Our third objective is to ensure that banking services are provided at rates that are reasonable and identical to those charged for using ATMs.

This is the thrust of our presentation. We can now pursue the matter further with other people in the coalition, beginning with Ms. Bourgeois.

Ms. Marguerite Bourgeois (Front commun des personnes assistées sociales, Coalition québécoise pour le maintien des emplois et services bancaires personnalisés): My name is Marguerite Bourgeois and I am on social assistance. I am here on behalf of more than 600,000 welfare recipients represented by the provincial agency the Front commun. We also represent 41 member groups of the Front commun.

• 1550

The problem that faces welfare recipients when trying to open an account is that they are asked to produce many documents: the social assistance card, the health card, the tenancy agreement and proof of residency. Some banks have asked people who are clients at the bank to accompany new applicants to the bank. In our opinion, this situation really does not make sense because whether or not we are on social assistance or employed, money has the same value.

In addition, more and more branches are shutting their doors. In Ville Émard, where I have been living for only a short while, two banks have already closed, including one at the corner of Jolicoeur Street and Monk Boulevard. I know that many elderly people live in this area. They have problems getting around and many of them are on social welfare. This situation has seriously inconvenienced these people.

It's all well and good to say that there is an ATM, but many of these people have problems using them. There is not always someone available at the premises to help them and show them what to do. We're often told that we have to use these ATMs, however, when you can barely read, it's very difficult to use a machine if you don't have somebody standing beside you who explains exactly what to do as the transaction is taking place, explaining which button to press, etc. The people are lost. I have seen people leave in tears because they were unable to complete their transaction. I am not just talking about the elderly or welfare recipients. I'm also talking about illiterate people, because there are still a lot of people like this.

In Verdun, I was part of a group that did advocacy work for the mentally handicapped. There was one ATM on Wellington Street which was reserved for these people on the first day of the month. A sign was posted over the ATM that read "disabled people only". This served to fuel prejudices and nobody felt comfortable using the ATM. Because of pressure exerted by community groups, this practice was abolished; however, it took several years before this practice came to an end.

In some places, if a person does not have a certain amount in his or her bank account on the 1st of the month, an additional charge is levied. The caisses populaires did this and we managed to put a halt to the practice after waging a big campaign. About six months ago, a bank located in Saint-Henri charged people who did not have a certain amount in their bank account $3. We find this unacceptable. This is why we are demanding that client services be re-established or maintained in banks so that people are not forced to use the ATMs, because these machines really do cause people big problems.

I will turn the floor over to Mr. Roger Lagacé.

The Vice-Chair (Mr. Nick Discepola): Mr. Lagacé, please.

Mr. Roger Lagacé (Association québécoise de défense des droits des personnes retraitées, Coalition québécoise pour le maintien des emplois et services bancaires personnalisés): Good afternoon, Mr. Chairman. Thank you for allowing us to appear today. We are very pleased to be here and we hope that our presentations will really make you aware of the need to use staff rather than electronic services, such as the ATMs.

First of all, I should explain that I represent the AQDR, the Association québécoise de défense des droits des retraités and also, for today's meeting, I represent the FADOQ. These two large provincial organizations have approximately 325,000 members in Quebec.

Over the past five years, we have observed, first of all, that the number of ATMs has risen dramatically; we have gone from 653 to 2,445, which represents an increase of 275%. What has the impact been? First of all, most of the tellers' positions have been abolished; consequently, there has been an impact on the labour force. Next the business hours of the branches were reduced. At one time the branches were open between 10 o'clock and 3 o'clock. And now, in many places they are open from 11 o'clock to 2 o'clock. In addition, the number of people working at the counter has decreased. Finally, the bank charges for counter transactions have increased.

When you use the ATM, you pay less charges than you do when you deal with staff behind the counter. In our opinion, this is a strategy designed to encourage clients to deal with machines rather than with people.

• 1555

I'm going to illustrate my point by drawing on two cases that were reported in La Presse on Monday, November 19, 1998. I have submitted some copies to you, contained in envelopes, thanks to my colleague, who is sitting here to my left and to whom I owe my thanks. There are a thousand such cases.

In one such case, it was 9:45. The branches were not open yet; the automatic teller machines were in operation. This happened at the Royal Bank in Anjou. A 69-year old man pounded on the printer saying that his card was stuck in there and that the teller machine was not returning his passbook. You can see right away that he panicked.

Right next to him, there's an 85-year old lady who just stands there hypnotized in front of the machine. For five long minutes, she tentatively presses a few buttons just to be flummoxed by a screen that gives her the same message in English: "Welcome to personal touch banking. To begin please insert your card's magnetic strip down and to the right. Le libre-service Royal vous souhaite la bienvenue". Well, this lady doesn't speak English and the only message she sees in French welcomes her to the bank.

So what happens then? Like many other people, in the two cases that I've just referred to, these two people agreed to give up teller service to settle for automatic teller machines. Both felt some anxiety when faced with this money machine, with the feeling of being spied on, with the feeling of being hurried by the long line behind them when they are very hesitant.

A few weeks ago, we read in the papers that in Montreal, for many months, thugs have been roughing up elderly people who went to automatic teller machines so that they would give them their cards. They collected these cards in order to use them in other ATMs. Many of these transactions were completed with the cards of people who had been man-handled.

In 1997, the SPCUM, the Montreal police, received over 300 complaints just about fraud artists; 65% of these frauds had been committed with debit cards belonging to people over 60. The average loss was between $2,000 and $3,000 in Montreal.

In addition, some elderly people forget their card in the ATM because they feel uncomfortable with the long line behind them.

With regard to the personal identification number, it is not necessarily confidential; when an elderly person goes to an ATM and needs help, the bank employee who will assist him or her will ask for the PIN. One is not supposed to reveal that number to anyone. However, the person dealing with the bank employee forgets about those standing behind and quickly gives out the number. The people in the line up can easily hear it.

The person is also asked what transactions they want to make. They answer that they want to transfer money, or withdraw some. They are then given a certain sum of money. So the system's confidentiality is not full proof. Sergeant Franciline Robinson of the Fraud Division in Montreal gave us this information.

In conclusion, we want to state that chartered banks constitute a service to the public. We're requesting that legislation force the banks to provide the public with personalized banking service, regardless of their social status or place of residence in Canada.

A majority of Quebeckers want to continue to be able to complete common transactions with the help of a teller in their branch. That's the wish of 83% of seniors. We expect the federal government to use all the means at its disposal to ensure that the financial needs of Canadians are taken into consideration. That means fair and reasonable services for all Canadians in all regions, whether rich or poor.

Let me close by saying that the single mother who cashes a welfare cheque and the pensioner who cashes his guaranteed income supplement are entitled to the same services as the more affluent who are buying a new condo or a CEO closing a multimillion dollar deal with a foreign country.

Thank you, Mr. Chairman.

The Vice-Chair (Mr. Nick Discepola): Thank you, Mr. Lagacé.

• 1600

We will now hear from Ms. Daren Laine.

[English]

Ms. Daren Laine (Member, Project Genesis): I am a member of Project Genesis, a community organization in Montreal. I joined the organization because I'm on social welfare and I wanted to find ways—

The Vice-Chair (Mr. Nick Discepola): One moment, please.

[Translation]

Is something wrong, Mr. Guimond?

Mr. Normand Guimond (Union Advisor, Coalition québécoise pour le maintien des services bancaires personnalisés)): Is the translation available in only one direction? I'm having trouble with the buttons. Imagine what I go through with automatic teller machines.

[English]

The Vice-Chair (Mr. Nick Discepola): Go ahead, please.

Ms. Daren Laine: I joined the community organization in my area because one of the problems I was having was banking services.

I'm also on the tenants committee of the low-cost housing unit in which I live, a unit of 100 tenants; I am the secretary-treasurer there. Half of the tenants in this building do not speak or read and write French or English. The majority of them come to me whenever they receive any correspondence at all, including advertising, and very often it's from the bank.

We all know that a cheque is totally worthless unless it can be cashed, but unfortunately people have a lot of difficulty cashing a cheque, especially the very low-income. Being in low-cost housing, we have problems with people not only being unable to cash a cheque but not understanding when something is explained to them. Only 10 out of 100 tenants use the machine, because it's very confusing for them. If the teller is free, even those 10 tenants will not use the machine; they'll go to the teller.

In my case, my problem was that I received my cheque and jauntily went down to the bank thinking my account of 30 years was still open. I was told that there was no such account any more. Of course, two weeks earlier there had been an account. I looked around for somebody in the bank who knew me, because we know there are changes of staff. Fortunately there was a person who had been my teller before, and I asked him to look into this situation because the teller who had told me that my account was closed would not. She had totally refused. She said, “ I'm sorry, we can't service you; your account is closed.” This young man was kind enough to find out why. It turned out that I had written a cheque for $24 and I was $2 overdrawn.

Everybody in our society needs an account, and finding that an account is so easily closed and so difficult to open is a terrifying experience. I stood my ground because I knew my rights. I was very shaken, because I had to pay my rent and buy food. You know, you have so many things to do with the money you have, especially being on a very small budget. I receive $600 a month, and every penny counts for me.

• 1605

I left the bank very shaken, even though my problem had been resolved. I had to stand there for a half an hour to insist that they look into the situation. I had been a customer for 30 years, and they saw that I wasn't going to leave. I said that my member of Parliament was two blocks away and that I would just walk over to her offices; it was no problem for me. So their tune started to change.

But then I started to realize how difficult it must be for those who don't know their rights and don't stand their ground. So I've gone and opened four accounts for people in my building who have had their accounts closed. Two were psychiatric, so I have to go with them every time, because I know the situation and they don't trust anybody else with their money. But their accounts have been closed 15 times in one year.

I understand that it's a difficult problem for the banks in the sense that they don't have the service to deal with people who can't regulate their life. But with more and more people now having problems at the bank....

On the other problem, I'm very lucky; I live in an area where there are six banks open. This is one of the very few areas that has not just one branch open—which many don't even have. That's only because I live in an area where there are six hospitals and the doctors' offices, and they all use the banks in the area in which I live.

If there was a regulatory system set up, like the CRTC for our media system, to make sure that everyone has access, that they be notified ahead of time, which they are not—I was never notified that my account was closed—and why those accounts are being closed, and that they can come to the bank and have someone there who will open the account for them with a definite set of reasonings and let them work their way through....

The banking system we know today is beginning to be geared totally towards people who have money, and the more money, the more attention they pay to people. But no one who comes to a bank should be refused an account or having their cheque cashed. My greatest concern is that I know a piece of paper is worthless unless it's a dollar bill.

It's the same as being homeless if you don't have money. You're out on the street. You have nothing left. But if you have a cheque in your hand, you do have the money. The welfare office tells you that you have money; the bank tells you that you have money. After all, it's sitting there right in your hand. But, no, you don't have it. You might as well write your name on a piece of paper for me.

So I've had discussions with people in my building. In fact, just yesterday when I heard that I was coming here, they were asking for somebody at the bank who they could go to and not close their account. There has to be a way for people to be serviced.

Also, the service charges are very high. When somebody like me receives $600 a month, and $1.25 is taken for each cheque that's cashed and $5 per month just to keep the account open, these expenses just add up. Then you come home and listen to the news, and you hear about the billions of dollars of profits the banks have made. It just doesn't make sense in a world where $600 is so important to a person to live on and there's so much difficulty for them to even receive that money from a bank, and the bank turns around and is telling you over the radio the tremendous amount of money they have on hand to work with.

• 1610

So when I was thinking about the CRTC and how it functions, because I have a little bit of knowledge about that, I thought what a good idea it would be if the banks.... I don't know if the banks are a public institution, but it's the only place to which anyone can go to cash a cheque.

Do the banks receive special tax breaks because they are public institutions, if they are? If they are not, where can we go if a bank won't cash our cheque? That cheque is a valid piece of paper. There's no reason a person shouldn't be able to cash it. It's an honest way of receiving our money. We're not cheating anybody. We receive this in good faith, and we expect to have it cashed in good faith.

I'm emphasizing this cheque business because it's just too shocking to realize what it would be like to live if I could never cash my cheque, that one means of support per month, because my standard of living depends on that, how I'm going to live, whether I'm going to be out on the street, or.... There's no reason a person should be worried about cashing a cheque.

The Vice-Chair (Mr. Nick Discepola): Could you wrap up and maybe conclude with your comments on what you would recommend to the committee, please?

Ms. Daren Laine: I would like to have clarified whether the bank is a public institution and is allowed to do what it's doing, like not servicing the public.

Secondly, I would suggest that there be a regulatory system set up so that every citizen receives good services from the bank, the services they should be receiving.

My third suggestion or request to be looked into is that people on welfare or receiving anything less than $16,000 a year should not have service fees. I say $16,000 because according to Canadian statistics $16,000 is considered the poverty level.

The Vice-Chair (Mr. Nick Discepola): Thank you very much. We'll probably engage in a dialogue and be able to answer some of the questions you had, but hopefully you'll be able to answer some of our questions also.

[Translation]

Ms. Thérèse Hurteau-Farinas, please.

Ms. Thérèse Hurteau-Farinas (Vice-President, Fédération des femmes du Québec, Coalition québécoise pour le maintien des emplois et services bancaires personnalisés)): I am Thérèse Hurteau-Farinas and I am Vice-President of the Fédération des femmes du Québec, a democratic, non-partisan political advocacy group.

The federation maintains a feminist stance, promoting access by women to equality, equity, dignity and justice in all areas.

We are a Quebec-based group and we want to affiliate ourselves with groups outside Quebec that share our views.

The Fédération des femmes du Québec also recognizes the importance of financial institutions in society. However, will all the mergers of these institutions allow society to be served as it should be?

We think that any merger of banking institutions may lead to quite dramatic consequences for the women of Quebec and the rest of Canada. To begin with, there would be a loss of jobs in a female- dominated economic sector. And then there is the possibility of a reduction in banking services available to the public as a whole, women and men of all ages.

Indeed, if mergers result in closing of branches, job losses, a greater number of automatic teller machines and less competition in the financial community, it is difficult to believe that people in general, and women in particular, will not be affected.

• 1615

Will all Quebeckers be able to access banking services that are essential to them? Will they have to pay more for this access? Will the consumers of banking services appreciate there being fewer and fewer tellers to answer their questions? Furthermore, will Quebeckers who are less well-off have to travel far from home, only to confront an automatic teller? Can a machine answer all the questions?

The Fédération des femmes du Québec wants to see personal, personalized banking services; it doesn't believe that people should be made to adapt to a machine.

We do not have to allow our behaviour and our choices to be dictated by purely financial interests. Each of us is entitled to use the financial services that fit our needs. In other words, let Quebeckers have the choice of using automatic tellers or client services.

Above all, we at the Fédération des femmes du Québec want to ensure, in any merger of banking institutions that might take place, that the integrity and unique needs of women are respected. We must not forget that they make up over half of the population, a half that is not often enough judged at its true value. Women are tired of being sacrificed on the altar of neo-liberalism.

The banks are already bringing in millions of dollars in profits every year. If bank mergers mean job losses for hundreds of women for the sake of an increased income for a handful of people who are already well-off, the Fédération des femmes du Québec cannot agree and joins its voice to those of the other members of the coalition in demanding that personalized banking services be maintained. We firmly believe that a healthy and just society must be based on respect for all its members.

Thank you.

The Vice-Chair (Mr. Nick Discepola): Thank you very much, Ms. Hurteau Farinas. Mr. André Sénéchal, please.

Mr. André Sénéchal (Member of the Coalition québécoise pour le maintien des emplois et services bancaires personnalisés): My name is André Sénéchal and I am chairman of the retired unionists group of the Montreal labour council of the FTQ. This is a regional branch of the FTQ. I sit on the FTQ committee for the handicapped and at the round table for the employment of handicapped persons in the Montreal region.

I will leave you the report that I am about to present; as you see, I did not have the time to make a photocopy of it. I've also left you my address; of course, I would like to have my report back.

The following data come from the regional diagnosis for the Montréal-Centre region, done by the integration fund. The report is quite recent, November 1998, and it deals with a population of handicapped persons between 15 and 64 years of age.

The Montreal urban community has a population of 1,213,000 persons. In 1992, the level of physiological distress was at 26.9%, affecting 22% of men and 31% of women.

In the Montréal-Centre region, 111,000 persons, or 9% of the population, have various kinds of handicaps, 58,000 are slightly handicapped, which is 52%, and 53,000 are severely handicapped, which is 48%. And I would like to speak to you about the latter group.

In this group, 32% are between 55 and 64 years of age, so it is an aged population; 27% of these persons live alone, as compared to 14% for the general population. For a person living alone, it is rather difficult to ask a wheelchair or an animal to run an errand at the caisse populaire.

The income of these persons, if they had full-time jobs, would be $29,000 for men, and $25,000 for women. Actually, the annual income is $16,779 for men, and $11,700 for women. Thus, these people need their caisses populaires and they need walk-up wickets.

• 1620

These handicaps involve sight, hearing, speech, mobility and intellectual performance. In the whole region 111,549 persons have these problems, and 53,000 of them are either moderately or severely handicapped. Thus, 4.3% of the whole population of Montreal has such problems.

Now I will give you an overview of the City of Montreal. It is divided into 13 regions: Ahuntsic, Saint-Michel, Rosemont, etc. I don't need to draw a map of Montreal for you. I will focus on a region that I know very well and on my personal experience in Montreal North, in the riding that Mr. Coderre represents.

In Montreal North, 53,090 persons are handicapped, representing 9.44% of the population. At the Sainte-Colette Caisse populaire, one of the largest in Montreal—it has two or three other branches in Montreal North—opening hours are from 11 o'clock to 2 o'clock on Mondays, Tuesdays, Wednesdays and Fridays and from 11 o'clock to 7 o'clock on Thursdays. There are two entrances because it is good, for appearances, to have an access ramp for wheelchairs at the main entrance. However, to get to the automatic teller, you have to climb a five-step stairway, without any access ramp. So, a handicapped person has to go to the caisse between 11 o'clock and 2 o'clock. How many caisses populaires and banks are there that are organized in this way? I can tell you one thing; there are many of them. It is not up to me to track them down; that is your role. But I know that they do exist.

During opening hours, at Sainte-Colette—and this is my personal experience as a client—since the opening hours were restricted in September, there is almost always a long line-up. And why? Very simply because people do not want to use the automatic teller. There are two options. You can wait in line, which is an impossibility for many handicapped persons who do not have wheelchairs. When seated in a wheelchair, it is tolerable, but when you have to stand and wait for three quarters of an hour to an hour, it is really much harder. The other option is to go to the information counter to carry out all kinds of transactions. There is a counter that everyone goes to. I went there. I had to explain my handicap because my handicap is not visible. Even though I am able to hold this pencil, I cannot pick up anything at all. I had to explain my handicap to the person. And please well that this happens in many places, because wherever I go to participate in meetings or for other reasons, handicapped persons tell me the same story. I do not know how many people I represent, but that is the way it is.

Since September, at that branch, two persons treated me well. Most of the time, when I go there, whoever I speak to sends me to the automatic teller. I said no and I won. How many persons succeed in doing this? I do not know. If that's the way it works at Sainte- Colette, I am sure that it is the same elsewhere. I am not the one to go and check into this, but I am sure of it.

• 1625

Further, the closing of banks will keep handicapped persons away. Perhaps you know about the special transportation system in Montreal, which is very pitiful. It takes 45 minutes, an hour and even an hour and a half to get the special transportation. When you get there the caisse populaire is closed.

I thank the coalition for having me given the opportunity to voice our concerns regarding banking services and I thank the standing committee for having heard them, and I hope that you will take note of them.

I would like to give you the regional diagnosis document. Perhaps you'll learn some new things about handicapped persons. This is a document from the CAMO, Comité d'adaptation de la main- d'oeuvre pour les personnes handicapées. Don't forget that Ottawa gives us a four-million-dollar subsidy. If you want to give us such a subsidy, it may be useful to take 15 or 20 minutes to read this document.

The Vice-Chair (Mr. Nick Discepola): Thank you, Mr. Sénéchal.

Mr. Normand Guimond, please, to conclude this part of the presentation.

Mr. Normand Guimond: Through our presentation this afternoon, we wanted to complete the intervention made by our coalition last November in Montreal. We added specific examples, testimonies, and you'll also note that there are a few repeats of the requests previously made by our chairman.

Mr. Chairman, due to difficulties in travelling to Ottawa for this consultation—we referred to them during the introduction—the rural and farmers' groups could not come with our delegation. They voiced their demands during the consultation held in Montreal on last November 3rd. We are taking this opportunity to remind you of the essence of the message that the president of the Union des producteurs agricoles, representing 46,000 members, delivered to Minister Paul Martin regarding the restructuring of financial services. I quote the president, Mr. Laurent Pellerin:

Everyone knows that big banks are first and foremost motivated by profit; they often choose to ignore social factors such as the maintenance of existing jobs or universal access, to personalized basic banking services.

We're especially concerned regarding what might happen to the accessibility of financial services in the regions. If the financial institutions were to trim down their outlying branches, where and under what conditions would farmers be able to access funding? Will they have to travel many kilometres, go somewhere else, to the city or another town, where they have less of a chance because they are not known? Will we be coming back to the difficult conditions that prevailed in farm credit at the turn of the century?

We must also be aware of the fact that financial institutions have an important role in the rural environment both as regards economic activity and as regards their contribution to community life. Let's remember what happened with the post offices... As always and even now, large financial institutions have a privileged access to wealth. And now they want even more. We are firmly convinced that they in turn are obliged to maintain accessible service everywhere for everyone and to foster job creation, which are two ways to redistribute wealth. This is not merely a social obligation but it is a moral obligation and the State must ensure that it is met.

This was the message that Mr. Pellerin sent to Minister Martin last autumn.

Now I'd like to say something about employment. I'm the spokesperson here today for Quebec's union movement. All the unions are represented. In your file, you'll see the 22 organizations that make up the movement; we represent over half a million workers, men and women. These people are unionized and they are also consumers.

Mr. Chairman, whatever sectors of the population are concerned, it is essential for the government to legislate to improve personalized banking services. Previous witnesses have been eloquent on this. To offer these services to the population, you need staff and jobs.

• 1630

Year after year, Canadian banks are making record profits. They're accumulating riches that they have an obligation to share in terms of services to the population and in terms of jobs. To make these profits, the banks have adopted a series of strategies and the main one has been to cut jobs in the thousands, especially since 1993.

Without considering any future bank mergers, an agreement by Deloitte & Touche is forecasting the closing down of half of all Canadian bank branches together with the loss of 35,000 jobs over the next three years. These are 35,000 people who will be wounded, affected in their dignity, their family life and their social life. A forecast of 35,000 job losses gives 35,000 good reasons for the federal government to legislate to civilize these holders of huge community riches.

The only goal of the restructuring of financial services and of the deregulation the banks are looking for is to satisfy the greed of their shareholders who only contribute 5% of the total capital of these various institutions. The banks have a social responsibility that they must translate into jobs for the benefit of local populations.

Our coalition is not against the installation or use of automated banking services. It mainly wants to see an improvement in personalized banking services, based on a poll conducted by Léger and Léger indicating that 89% of the Quebec population considers the government must legislate with a view to ensuring and improving personalized banking services.

Honourable members, our coalition represents Quebec society just about completely; you have only to look at the delegation and the list of organizations that are part of this. In the name of all citizens, of all the consumers we represent, we are asking you to meet our demands to ensure them the bank services and jobs to which they are entitled. Thank you, Mr. Chairman.

The Vice-Chair (Mr. Nick Discepola): Thank you, Mr. Guimond. I would now ask Mr. St-Amant to conclude this part of... [Editor's note: Technical difficulties]

Mr. Jacques St-Amant (Analyst, Option Consommateurs, Coalition québécoise pour le maintien des emplois et services bancaires personnalisés): You already know the problems; we have addressed them a few times as have others. I'd like to quickly backtrack to a few elements, but mainly look at the solutions that you, as legislators, can take an active role in.

In short, deposit-taking institutions would rather not offer certain services anymore, even though the population is requesting them. It seems we can't count on competition to solve these problems, either now or in the future. Now, we must ensure that all Canadians can have access to affordable basic banking services covering their needs. The customer should decide which services should be available on the market, not just the businesses offering them.

I will cover the three broad questions that interest us: access to basic services, branch closures and banking costs. First, let's talk about access. The Standing Senate Committee on Banking, Trade and Commerce and yourselves confirmed it in December: it is essential that all Canadians who so wish be able to access basic banking services. They must be able to open an account, deposit their funds and withdraw or otherwise use them. Unfortunately, in the cities as well as in the countryside, we must note that this is not always the case. You acknowledged that in your preliminary report and you also supported the thrust of the task force's recommendations 88 to 92. We are heartened by your position but we must invite you to take another step forward, for two reasons.

First, the task force drafted its recommendation 92 on the basis of the facts publicly known at the time and it therefore emphasized access problems related to identification. But the situation has changed rather markedly over the last year.

• 1635

That is confirmed by a study done by A.C. Neilsen for the Canadian Bankers Association, the result of which were made public in August 1998, barely two weeks before the publication of the task force's report. There are also indications to be found in an investigation made by Option Consommateurs, the organization I work for, which was published last fall and which we distributed to you when we last appeared before this committee in November.

These two studies underline two trends: as to identification requirements, things are improving very slowly and new hurdles are cropping up. Credit checks are becoming standard, for example. When a consumer enters a branch to open an account, he is likely to be invited to come back the following week because no one is available at that time. Delays are imposed before the account is opened or active. Holds on funds are also frequent. For example, if you want to open an account, all the cheques you deposit will be frozen for a week or two for the first two months. Of course, for someone on welfare, this is, in practical terms, a refusal to provide service because this person needs access to the funds immediately.

You sometimes get strange cases. Last month, for instance, a consumer complained to us. She had gone to a bank branch near her home, in a Montreal suburb, in order to open an account. The cashier asked her, amongst other questions, whether she had a job. She replied she did but she preferred that the bank not communicate with her employer, which she had a perfect right to do. There is nothing in particular which allows a bank to communicate with an employer concerning a client, especially for simply opening an account. But the bank found that a bit fishy or abnormal. A credit check was undertaken and it showed the lady had gone bankrupt a few years earlier. The bank refused to open an account for her.

I would remind you that there is an agreement between the Canadian Bankers Association and the Minister of Finance that came into force in December 1997 whereby the bankers have promised not to refuse opening an account for reasons of bankruptcy. Unfortunately, the branches have not yet got the message.

This consumer had actually been discharged from her bankruptcy. To our knowledge, there is no rational basis for refusing her an account. The consumer and ourselves communicated with the branch manager, the head office and the bank ombudsman, all to no avail because they don't trust that person. No reasons were given; we were simply told they refused to give her an account. People in that institution didn't understand why the lady wanted to open an account with their branch as she already had one elsewhere. Apparently, these people aren't aware of the laws of competition in the banking world nor of the fact that one might wish to change institutions. We found that slightly astonishing.

In the past few months, we were also made aware of cases where there were refusals to open an account because people didn't have credit cards. Some customer service representatives have told others that having made out even one NSF cheque during the past year was reason enough to be turned down. In short, impediments are multiplying.

The first agreement between the CBA and the Minister of Finance was reached two years ago. Things have not changed much; in fact, they are getting more complicated. Despite the appreciable efforts made by the Canadian Bankers Association, things have not started moving at the branch level.

The Task Force invited Parliament to legislate if progress was not made within a reasonably short time: it is our view that this delay has elapsed.

Legislative action could take many aspects. For instance, Parliament could establish that a bank accepting consumer deposits must open forthwith a basic account for any person showing one piece of identification among those listed in regulation, unless it has reasonable cause to believe that such identification is forged or that the applicant intends to use the account in order to facilitate the commission of illegal acts. That already exists in some American States.

Or, taking a cue from French legislation, Parliament could also provide that the Consumer Protection Bureau, the creation of which is envisaged, may designate the bank which should open an account for a given person who would have been turned down twice in a row, for instance. So there are some potential solutions that are already used in other developed countries.

Besides, given banking practices which are sometimes incomprehensible, Parliament should set rules regarding holds on funds, following the example of the United States legislation adopted in 1987 under President Reagan, who was not renowned for being an ardent leftist.

• 1640

It is truly said that Canada has one of the best clearing systems in the world: it is only fair that all Canadians should profit from it equally. Yet, an Ekos survey conducted last year for the MacKay Task Force showed that 18% of Canadians see, at least occasionally, holds put on their funds, and 68% among them see the wait as a problem. So action is required, especially since victims of that practice are disproportionately found among the young and low-income consumers, since more than one quarter of people in these two categories declared they had to wait for access to their funds.

Another factor is relevant: risks of fraud. Careful! Data from the Receiver General of Canada show that barely a hundredth of one percent of all items drawn on the Receiver General are falsified, and their amount is usually above average, or at least more significant than simple GST rebates or employment insurance benefits.

The inability to access basic banking services is a serious and persistent problem that should be fairly easy to solve. We therefore urge you to recommend in your final report that Parliament legislate, in keeping with the MacKay Report, so that these practices can be put behind us. We have been discussing these issues with bankers for about 10 years now.

I will now move on to bank closings, which are a serious problem in many ways. First, they hinder account opening: it is fairly infrequent that a customer will be able to open an account through a banking machine, a phone or the Internet. You must usually visit a branch to do so. That is a problem if the branch no longer exists. Secondly, closings hit certain types of regions harder. Third, they have a disastrous impact on some types of customers.

Let's look first at the regional question. We handed out maps of the City of Calgary and of a part of Eastern Ontario. If you look carefully, you will see red dots and green dots. The red dots indicate branches that closed. In Calgary and in the part of Ontario that stretches roughly from the Quebec border to Kingston, for the 10-year period from 1987 to 1997, you can see several red dots, primarily in rural areas and in downtown Calgary. There are also some green dots, which represent new branches, mainly in the suburbs.

These two maps come from a study that Option Consommateurs published last June. They are about 20 in total and some are truly revealing. Everywhere, the trends are the same. That has an impact on nearness to services. Branches are further and further away. It also has an impact of the diversity of services. If you look at map 18, the map for Eastern Ontario, you will notice in grid areas C and D-6 and 7 that there are practically only the Bank of Montreal and TD Bank branches in the area, and the area is almost 100 square kilometres. There is not really any choice.

The situation is similar in many regions in Canada. I am thinking for example of Cape Breton, where over a large part of the island there are only a few credit unions, two or three Royal Bank branches and, at the end of the peninsula, a branch of the Bank of Nova Scotia. That is all.

If, shopping on the Internet, you realize that the CIBC offers the most advantageous account, tough luck; the closest CIBC is easily 80 kilometres away. But, some might say that that is not a problem: people can go the banking machine or use other electronic services. The evidence we heard earlier on illustrated, in my opinion, that reality is not as simple.

Statistics also clearly show that it is not that simple. A CROP poll conducted in January 1998 showed that 23% of Quebec consumers never use the banking machine, a proportion which grows to 27% outside Montreal and Quebec City, in rural areas where there are fewer banking machines; 39% in low-income households; to 53% among seniors who never go the banking machines; and 60% among people with less than eight years of schooling. That is a lot of people.

Seventy-five percent of Quebec consumers use the automated teller on average three or four times a month, that is, almost weekly. It is therefore not surprising that, according to the aforementioned Ekos survey, 67% of Canadians would declare that it is extremely important for them personally to do their banking in person at a branch, a proportion which grows to 72% among middle to low-income households, to 79% in rural areas and to 86% among elderly people.

• 1645

In short, Canadians are not resigned to their branch closing down on them. In fact, the same Ekos poll showed that 56% are of the view that banks should not be allowed to close branches merely because customers have access to electronic services. They have every intention of continuing to use in-person services, rather than banking machines. At the very least, they want to have the choice.

For low-income customers or for those with a low level of instruction and for some handicapped people, access to a teller is practically essential. We may no longer need such big buildings dedicated to banking, and it may be possible to move in-person services to supermarkets or elsewhere, but customers require more than banking machines.

We believe therefore that it is not enough to state that branch closings are unavoidable, and that a four-month notice would be enough for everybody to adjust. The stakes are too high, especially regarding service quality and regional competition.

The following proposal should be considered: when a bank wishes to close a branch, it should advise the community, but also the new Consumer Protection Bureau that is envisioned. The Bureau should be given the mandate, as required, to hold public consultations to hear reasons from the bank, and to examine the socio-economic impact of the bank's closure on the community.

The Bureau should also be able to authorize or disallow the closure, or authorize it under certain conditions including, perhaps, the payment of financial compensation to the affected community. This would doubtless encourage bankers to study their planned closings much more seriously.

Some of you might have seen the Marketplace program last September, the subject of which was bank branches in Lynn Lake and Ottawa that the banks planned to close. People protested, and one of the banks realized that it would cause problems. Measures were taken after the fact by the banks. This is the kind of error that must be avoided, because it affects the people and the economy. These effects are rather scattered and are difficult to integrate and measure, but they are nonetheless real.

The same Consumer Protection Bureau could also keep an eye on the business hours of branches because, in some cases, they are rapidly decreasing. There was talk earlier about a caisse populaire. The same applies to the banks. In any case, it is something to keep an eye on.

One final point on branch networks should be taken into account by the Minister of Finance in examining major operations such as mergers. The American authorities look at them regularly. When First Union Corporation and CoreStates Financial Corporation merged last year, an agreement was submitted to the authorities whereby the institution pledged not to close any branches in a quarter with low earnings, unless it maintained one or opened one within a one-third-mile radius of the one closing, for a period of two years after the merger. When I look at the situation in Montreal and the closings there, I have to say that we are a long way from the results being obtained currently in the United States.

An affordable service is obviously essential. It's not enough to open a bank account, you must also be able to pay the charges. In this respect, the efforts being put forth by the financial institutions vary considerably. Some offer some very interesting packages; here I'm thinking about the CIBC and the Caisses Desjardins in Quebec where, for relatively small amounts, people can carry out a small number of transactions, which is better than nothing. But these packages are not very well-known, because the financial institutions do not make much of an effort to publicize them.

This reflects a serious chronic problem in the market: it is very difficult for consumers to figure out the maze. In many cases the folders and brochures are incomprehensible. Last year, for example, our magazine conducted a study on bank charges. We prepared four consumer profiles and asked the main institutions what kind of account each type of customer should open, and how much it would cost per month. Some people in the headquarters of financial institutions made miscalculations. You can imagine how bewildering it is for the consumer.

Quite recently, Industry Canada's Office of Consumer Affairs publicized the results of its initial annual investigation into bank charges. These results also illustrate the complexity and diversity of business accounts. This is a step in the right direction, but more needs to be done.

• 1650

As was mentioned earlier, the current fee schedule is notorious for pushing customers into electronic operations. Here is a simple example: last fall, a growth account with the Toronto Dominion Bank featured fees of 60 cents for a withdrawal at the branch, and 40 cents for a withdrawal at the banking machine. These were $1.90 for a bill payment at the branch, and 40 cents at the machine.

The bankers tell us that electronic transactions are less expensive. That may be so, but there is very little published information for those who wish to make a judgment on the subject. There are even fewer figures for assessing the viability of electronic operations. In short, at the present time, it is not known how much it is costing the banks and what profits they are making, or not making, with present services.

We do know that a banking operation on Internet costs the bank about 1 cent. Believe me, the fees they charge the customers are higher than that, and no doubt the profits are very hefty. But we do not have any specific data to verify this. It would be possible to take concrete measures to increase the visibility and the intelligibility of documents concerning banking charges, as with the other documents referred to in the MacKay Report.

The development of the market should also be watched continuously and, as I mentioned earlier, the Office of Consumer Affairs has set this process in motion. A consumer protection group could doubtless do a better job and do more.

It is also necessary to introduce measures that will increase transparency, such as divulging the financial statements of institutions, in order to really find out what is being talked about.

In conclusion, as mentioned above, banking services are essential. Unfortunately, current banking practices are leaving aside a growing part of the population. In fact, bankers are presently nurturing the development of a fringe banking sector consisting of pawnbrokers and companies such as Insta-Cheques. This does not benefit anyone. It is a trend that can be stopped if the financial institutions will take their customers' real needs into account.

Unfortunately, it seems that they will have to be nudged by some benign legislative measures, which would at least give all Canadians access to affordable personalized services. For millions of Canadians, the future of Canada's banking sector calls to mind not changes in the power of banks or other structural questions, however important they may be, but rather something very concrete, namely, will I still be able to go to the bank? The answer to this question will determine how Canadians assess the upcoming reform.

Thank you very much.

The Vice-Chair (Mr. Nick Discepola): Thank you, Mr. St- Amant. We will now go to questions from the members. Let us begin with Mr. Ken Epp of the Reform Party.

[English]

Mr. Ken Epp (Elk Island, Ref.): Thank you, Mr. Chairman, and thank you to all of you for coming today to inform us of your point of view.

I should perhaps also apologize for the fact that I don't speak the French language. I grew up in a part of Canada where there were no French-speaking people at the time. When I was a student, I loved math and science, so I took all of those options and didn't take the French option. Now I really wish I had so that I could communicate with you in your language. The students I taught were very pleased I could speak in English because that was their language as well.

I'd like to get right to the point here. You've articulated very well some of the frustrations of people from the different categories that are represented here—that is, the elderly, those who are handicapped, those who are not endowed with a great deal of wealth—in their ability to access banking services. I'm quite sympathetic with what you're saying, which is that it's quite necessary in our society nowadays to be able to conduct financial transactions, to be able to receive money and to spend it.

It seems to me that the problems you are identifying should have some pretty simple solutions. I'm no friend or defender of the banks, I assure you, but when you describe some of the barriers you have faced, in my mind I'm wondering why the banks would do that, because there's no benefit to the banks in making people dislike them. There's no benefit to the banks of turning away business.

• 1655

I can see why they have some of their regulations. For example, with regard to identification and requiring you to have an account before you can cash a cheque, I think that probably evolved because people walked in with paper that was not theirs—they had stolen it, found it, presented it as their own—and then the true owner comes along and says, “I want my money.” I think that's probably where it started. If we lived in a society where everyone was totally honest, then I suppose banks and business people wouldn't have to put up these barriers. I think that's a reality we're going to have to accept. I don't know how you feel about that, but I just don't know how to avoid that.

When I was a youngster growing up in Saskatchewan, we didn't have locks on our doors. Now my parents have not only a lock on their door but also a deadbolt lock, because times have changed. It used to be that you left your house open so that if someone came by who needed the warmth of the house when you weren't home, it was there for them. Now you lock the doors because people will come in and take what is not theirs.

I think those are changes. Now, how do we adjust? I've heard a few suggestions, including regulation and legislation that require banks to keep their branches open whether or not they're making a profit there. I just have to ask the question, is it realistic to ask a business such as a bank to stay open and to not lay off staff at a loss of profit? We don't expect this of any other business. We don't say to the drug store, “We want to be able to come in and buy your supplies at less than it costs you to buy them and market them.” We need to reconcile this.

I was particularly interested in Ms. Laine's presentation. She speaks of welfare people, and it must be very frustrating for them not to be able to have an account. I want to ask her this question: Do the 100 families in the apartment you live in object to the identification requirements when they go to cash a cheque?

Ms. Daren Laine: No.

Mr. Ken Epp: So there's no problem there. Presenting an ID with a photo is no problem.

Ms. Daren Laine: No. They would consider that reasonable. In fact, they usually walk around with all this ID in their purse, even passports.

Mr. Jacques St-Amant: I must agree with Mr. Epp that indeed times have changed and banks are even more essential to modern life than they used to be.

[Translation]

Why are banks sometimes hesitant to serve a part of the population? It may be, among other things, because these are people who are not profitable, or are less profitable than others, unfortunately.

You were talking about identification and fraud risks. Let me go back to the figures I was quoting from the Receiver General of Canada. Only about one hundredth of one percent of the cheques issued by the Receiver General in a year are falsified. According to data from the Quebec department managing social assistance, the number of bogus cheques is about one-thousandth of a percent. Is it necessary to impose stringent requirements on the whole population when there is such a small amount of fraud? I'm not sure. It's a little like putting a policeman on each street corner. It would certainly reduce crime, but it would involve costs and disadvantages that would best be avoided.

You were talking about better planning of bank branch closings. Already in Canada and elsewhere, some private companies are the subject of constraints preventing them from interrupting customer service as they please. Here I'm thinking of telephone companies such as Bell Canada, B.C. Tel, Telus Corporation, etc.. Some railway companies cannot simply decide tomorrow morning that they will stop servicing a certain line. They must follow a certain procedure to obtain authorization. The same thing applies in air transportation and other fields, because these companies provide services essential to our society.

• 1700

What we are proposing is not completely new or unrealistic; such things already exist in other industries, and in other places, including the United States. So it can be done. Of course, we may no longer need a traditional bank branch in all cases. Obviously, a branch the size of this room may not be necessary in some neighbourhoods. Perhaps there could be a much smaller space or an area in a supermarket. We would find that very suitable, provided the services remain accessible, provided there are human cashiers and provided the services remain affordable. Generally speaking, however, when a branch closes, the banks generally replace it with an automatic teller. That's the problem.

[English]

Mr. Ken Epp: Would people in the groups you represent be open to direct deposits, for example? I take it a lot of them are receiving money from government either in terms of pension cheques or welfare payments or that type of thing. I know governments are really pressing for direct deposit because it also saves them money. It's much less expensive to process electronic payments, and this would simply put the money directly into their accounts. That would nullify the need for holding the funds, because when the Government of Canada, for example, transfers money into an account, it's as good as cash. The funds don't have to be held, so people can walk into the bank whenever payday rolls around, present their proper ID, and receive the amount of cash they want.

I think that system is better, because if we lose the security of the cheque that's issued, if we make it too easy to cash those cheques, then I think we increase the risk of our elderly people being robbed by thugs. Thieves can now go into a place, steal their cheques, and go in and cash them easily even though they're not authorized to. I wouldn't want that to happen.

So would there be an openness to direct deposits, and should we work on that end of it?

Ms. Daren Laine: I would like to answer that question. It's a very important one because it involves every citizen, not just the ones who have low incomes like those in our building.

The City of Montreal, which administers our low-cost housing unit, had a huge campaign on what you're talking about, on direct deposit. Even I do not have direct deposit for my welfare cheques. I have direct withdrawal that the City of Montreal takes out, but I don't know why I'm reticent. There's no reason I should be reticent about the welfare cheques going into my account, but somehow I like to receive my cheques. Somehow, somebody doing everything electronically—my cheque going into a bank, my cheque being withdrawn.... Through all of those functions I'm not even there, I don't even exist. I realize the logic is good, in my opinion, but still I have this feeling that I'm a non-entity over my money.

Mr. Ken Epp: I find this very curious.

The Vice-Chair (Mr. Nick Discepola): We're going to stick to ten-minute rounds first, okay? You're already at eleven minutes, and we have a vote a 6.15 p.m.

Mr. Ken Epp: Do you want to let me just finish with a little, quick one?

The Vice-Chair (Mr. Nick Discepola): All right.

Mr. Ken Epp: I think you express what a lot of people feel, because I've met them too. Should we somehow give them a greater assurance? I don't know how to do that, but I know that I myself have been on direct payroll deposit for about fourteen years. In that whole interval, every time I've gone to a machine with my card to get $100 cash, all I've had to do is put the card in, punch in my four-digit PIN, take out my card, my statement that says how much money I have left in my account, and my cash. It has worked every time. I think it would be an answer, but how do you educate them, how do you teach them to trust? I guess you people know that more than I do.

The Vice-Chair (Mr. Nick Discepola): Let two other people answer that, maybe.

• 1705

[Translation]

Mr. Vaudreuil, followed by Mr. St-Amant.

Mr. François Vaudreuil: The direct deposit question is a very interesting one, because it leads us back to a fundamental problem—namely, providing personalized banking services, by which we mean service by human beings, not by machines. An approach based on service by human beings means that we must allow people to choose between direct deposits and cheques. We should respect every individual's choice. The computerization of banking services like the introduction of new technologies in any work situation, has given rise to fear and feelings of insecurity. To date, I don't think banks have assumed their responsibility for making their customers feel secure. We need only think of the insecurity many illiterate Canadians must feel. I don't know of many banks that make things easier for those individuals; the banks tend to exclude them. We find it unacceptable that some members of our society are excluded. As far as we know, the banks aren't in any difficulty. They should therefore be looking into literacy problems and people's resistance to change.

We want you to pass legislation so that people can continue to choose how they want to do their banking. Rather than having marketing campaigns to explain their very complicated programs, banks should be trying to make banking operations understandable to the average person and helping people who need help by offering real, personalized service provided by human beings. What we are calling for is not complicated. We want the banks to look after people. We think this is one of their basic responsibilities.

We think that everyone should be free to choose direct deposit or not, and that banks should be responsible for teaching people who choose direct deposit how to use the new technology.

The Vice-Chair (Mr. Nick Discepola): That obviously means that a person who chooses direct deposit has already opened a bank account.

Mr. Jacques St-Amant: You took the words right out of my mouth, Mr. Chairman; you guessed what I was thinking. As Mr. Vaudreuil was mentioning, the first point is about people's right to choose. The second point is that financial institutions have to agree to open accounts. And third, we must remember that it's becoming increasingly easy, even for average or wealthy consumers, to lose complete control of their account, because some funds are coming in through direct deposit, while others are going out through pre-authorized debits. Unfortunately, errors happen often with these pre-authorized debits, so that people no longer know how much they have left in their account and whether they have insufficient funds in their account because a pre-authorized debit came in to soon or because a transaction was forgotten. There can be some very good reasons why people prefer to continue to do their transactions on paper so as to understand what is going on.

The Vice-Chair (Mr. Nick Discepola): Very briefly, Mr. Lagacé.

Mr. Roger Lagacé: Mr. Chairman, I would like to add to what Mr. Vaudreuil was saying and to focus more specifically on retired people and seniors. My colleague, André Sénéchal, was referring to the city of Montreal North, where I live. The population is 83,000, 17,000 of whom are retired people and seniors—that is, about 20% of the population. As Mr. Vaudreuil was saying, for all sorts of reasons, including illiteracy, people feel panicky when they have to deal with an automated banking machine, a new piece of technology that they feel they cannot control. These individuals may have already lost some of their independence, and they may no longer be as sharp mentally as they were in their younger years. Seeing a long lineup of people behind them may cause them stress and make them feel panicky. These are very important points we should be aware of, and we are asking the Canadian government to take them into account. The situation is the same throughout the country. Whether a person is 65 or 85, living in Montreal North, Montreal, Winnipeg or Vancouver, he or she will experience exactly the same problems.

• 1710

So what we are calling for is personalized service. Mr. Epp's suggestion of full direct deposit is definitely a partial answer, but it is not the only one. When you have to go to your bank to withdraw, transfer or deposit money, you have to deal with a lineup and do your transactions during certain limited business hours. As I said in my presentation, banks used to be open from 10 a.m. to 3 p.m., but the hours are now 11 to 2. There are a host a similar, human problems that have to be dealt with. Even though clerks try to teach retired people and seniors how to use these infamous machines, and even though these people gradually learn how to use them, every time they do, they feel panic. Although people can assimilate some concepts at age 70, 75 or 80, I very much doubt whether they can feel completely in control of the situation. Thank you.

The Vice-Chair (Mr. Nick Discepola): Thank you. Two other witnesses have also asked for the floor. Perhaps they could make their points in answering upcoming questioners.

You have 18 minutes and 20 seconds, Mr. Loubier.

Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): Thank you, Mr. Chairman.

Welcome and congratulations on your presentation. Your comments confirm that we were right to work hard to get an extension to our consultations on the MacKay Report. You have shed a completely different light on the issue from what we have heard since the beginning of our hearings on the report. Your views emphasize the human factor and you raise a number of issues in this regard. That is very much to your credit. I am very pleased that you are here today.

Since we knew or anticipated people's problems with banks, in 1997 we suggested that a special committee of Parliament be set up to hear, every year, the complaints of the consumer groups, welfare recipients, the handicapped and senior citizens regarding bank charges and bank services or the lack thereof. We suggested that banks be made accountable to this committee and be required to do better if they were found lacking as regards charges and non- existing services.

Are you in favour of establishing a special parliamentary committee of this type that would have the same power to investigate banks, their service charges and discriminatory practices?

That is my first question; I will have others later on.

Mr. Jacques St-Amant: Thank you. It goes without saying that it could be beneficial to have Parliament play a more active role. I think the main task of such a committee would be to ensure that problems become better known. The issue of access has been known to people for some years, and unfortunately, we have not seen things change very quickly. Although a committee might be useful, I feel it could prove inadequate.

Mr. Yvan Loubier: Mr. St-Amant, this special committee of Parliament would have the authority to require bank branches to make some changes in areas similar to the one you mentioned earlier with respect to ID cards. The existence of such a committee, with regulatory power and the right to require bank branches to make improvements would have corrected this problem, that has been around for two years.

Mr. Jacques St-Amant: Yes, probably. However, I'm not sure that members of Parliament would have the time to meet regularly enough to hear the flood of complaints they could get. As a result, I would be inclined to say that we should perhaps consider setting up a permanent administrative body. In your preliminary report, you recommended that an ombudsman be established. That could be a very important tool.

Clearly, parliamentarians can play an important role, but I am not sure that you would care to get involved in settling thousands of disputes every year between Canadians and their financial institutions. It might be advisable to continue looking for the tools best suited to the needs.

• 1715

Mr. Yvan Loubier: You spoke about freezing funds earlier and mentioned the example of the U.S. legislation. Has this policy simply been banned in the United States, or is still acceptable in some circumstances?

Mr. Jacques St-Amant: The American legislation is quite complicated, but essentially it provides that some money must be available immediately, or other funds must be available within a relatively short time. In the U.S., banks are not allowed to do what they do in Canada—that is, sometimes they decide to freeze funds for 10 days, two weeks or one month, as we have already seen.

Mr. Yvan Loubier: I see.

Mr. Jacques St-Amant: If you like, I could send you more information on this.

Mr. Yvan Loubier: I would appreciate that. Your suggestion regarding announcing the closing of any bank branch and holding a public inquiry into the consequences seems most interesting to me. We might also consider a similar process in the case of complaints about bank charges.

My question is more about what is happening at the moment. Many people are already experiencing the consequences of bank branches that have been closed in the past, and are deprived of service. They are sent to the automated banking machine. What is being done about this situation?

You spoke about the future, but I think we are missing something, because at the moment, we should perhaps be assessing the situation and correcting some situations that are unfair or harmful to people. What do you think about that?

Mr. Jacques St-Amant: Obviously, this is not a simple matter. If Parliament wanted to go so far as to tell financial institutions that they must offer services and that if they do not, steps will be taken against them, well, my goodness, we would have no objection. If Parliament were to decide not to go that far, we would have to rely more on the rules that could be played by public pressure, perhaps through a committee similar to the one you were describing. A study done by Option Consommateurs last year shows that there are entire regions of the country where there are very few banking services. In some cases, the efforts made by members of Parliament managed to save the service that formerly existed. But we need to debate the issue of the level of service, which may be different, but which should be acceptable.

Mr. Normand Guimond: Mr. Loubier, we mentioned that banks that were planning to close down branches should give some notice and that a committee should assess the effects of the proposed closures. I would even go so far as to suggest that a local committee be established in such cases. We have to work from the principle that financial institutions have a very important social responsibility in people's everyday lives in all parts of the country, whether they are far removed from urban centres or not.

I'm pleased you asked about the current situation. I think the disaster has gone on long enough. Our coalition would probably be the first group to call for a moratorium to put an end to the serious disaster that is going on at the moment. Banks are more than a financial service; in rural communities, among other things they are the focal point for all social and economic life. We saw how important they were when the people of Lac-au-Saumon in Eastern Quebec took charge of the Caisse and organized a referendum in which 90% of people voted to retain the Caisse. People had to fight every step of the way. It is more difficult in urban centres, but the same danger awaits us.

I would like to come back to what Mr. Epp was saying and tell you that I think banks could solve problems of this type. In the end, everything depends on how much importance we attribute to them. We cannot rely on banks because they are concerned about protecting their shareholders' dividends.

We are asking you to defend people's rights, because a growing number of people are being subjected to unfair treatment every day. That is your responsibility. Mr. Martin rejected the bank mergers, and I think he made a courageous decision until such time as we have the time to check on everything that is happening. We could do the same thing in this case and impose a moratorium on all bank closures. That would give us time to see where we are headed and to avoid the great harm we are doing at the moment.

The Vice-Chair (Mr. Nick Discepola): Mr. Lagacé.

Mr. Yvan Loubier: Will you give me some more time later?

The Vice-Chair (Mr. Nick Discepola): Yes.

Mr. Roger Lagacé: If I may, Mr. Loubier, I would like to speak briefly about bank charges. Although we made specific mention of seniors earlier, I will be speaking now on behalf of all consumers.

• 1720

When you go to the wicket and deal with a human being, the charges are higher than when you go to the automated banking machine. When you pay your Bell Canada or Hydro-Québec account at the automated banking machine, there is no charge; but when you pay the teller, the charge is about $1.75. So the charges are high.

The Association québécoise de défense des droits des personnes retraitées is asking that bank charges be fair and non-discretionary. The charges should be the same at the automated banking machine and at the counter. We should not be taking devious steps to force seniors to use automated banking machines. We know that the elderly are more careful with their money than are people generally. Thank you.

The Vice-Chair (Mr. Nick Discepola): Thank you. Mr. Sénéchal.

Mr. André Sénéchal: We should not be trying to find solutions for all the problems. We spoke earlier about direct deposits.

I fill in income tax returns for senior citizens and the handicapped. I do about 200 of them a year. I have some experience in working with these people. Perhaps five of this group have chosen direct deposit. It is easy to do that. People simply have to indicate on their income tax returns that they want the cheque deposited directly into their account, and they get it. We should not be looking at the easiest solutions. That is not what people want. They do not want direct deposit. They don't have bank accounts. The simplest solution is not to make a check in the box. We should bear in mind that in order to get direct deposit, people have to enter their bank account number.

The Vice-Chair (Mr. Nick Discepola): Mr. Loubier.

Mr. Yvan Loubier: You have read the MacKay Report, have you not? You are very familiar with it. You probably are more familiar with it than are most of us here.

The MacKay Report mentions a trend towards deregulating financial institutions. It states that at some point, it will be almost inevitable that not only banks but other institutions in the financial area provide banking services. This is called deregulation.

If deregulation is limited to the banks without taking into account what is happening elsewhere, we may miss the boat. You may lose a bank in your area. Another financial institution may accept deposits, and issue cheques, etc. and it will step in, but it won't be a bank. Nevertheless, the legislation applies to banks.

How do you respond to this?

Mr. Jacques St-Amant: The answer to your question is contained in the question. The solution is not to target banks specifically, but to cover all deposit-taking institutions, now or in the future. For example, if it requires provisions in the Insurance Companies Act, they will be implemented. If it requires provisions in the Trust Companies Act or the Loan Companies Act—and this will be necessary—they will be implemented. This is already happening elsewhere. There are overlaps in a number of fields already, and there are corresponding divisions in the three acts. So this is not a critical issue. We have to think about it at the present time, but it is not a major problem.

Mr. Yvan Loubier: Mr. Chairman, I would like to ask a final question. I would have hundreds to ask, but we don't have enough time.

What do you think of the American community banks? Could American community banks provide part of the answer to your general problems?

Mr. Jacques St-Amant: Steps are being taken towards community banking services. I'm thinking, for example, of micro-credit in certain areas or sectors.

American community banks have developed because they operate in a market that is totally different. It is a market that presently has some 9,000 banks. Until just a few years ago, it was extremely fragmented. It is much more difficult for a new player to set up and break through in Canada. It is not impossible, but it is not going to happen overnight.

The Task Force has wagered that the new reforms it is proposing will allow new financial institutions to emerge. This may be the case, but I don't think that the reforms have to be designed to achieve this. If it happens, so much the better. But it may be the case that it won't happen at all, or that it won't happen everywhere, far from it.

Mr. Yvan Loubier: But you are closed to the MacKay proposals. In any case, that might lead to desirable developments.

Mr. Roger Lagacé: Mr. Loubier, I think that you are just about finished. Allow me to make an observation.

Mr. Yvan Loubier: It's not me; it's the chairman who wants me to stop. That's why I am hurrying. I would have no trouble keeping you here until midnight.

• 1725

Mr. Roger Lagacé: Allow me to make a comment on direct deposit. I would like to remind you and other members of the committee that during a CROP survey—my colleague Jacques can correct me, if necessary—26% of respondents stated that they never used an automatic teller. This doesn't mean that they don't have bank accounts, nor does it mean that they all have bank accounts. So we have to remember that some people will not take advantage of direct deposit. This doesn't refer only to government cheques, but to all sorts of cheques. In the thinking that will lead to your decision, you will have to ask yourselves what should be done for these people. Don't forget personal cheques. Suppose that I write you a cheque. Should I be able to use direct deposit? This subject should be discussed, because some people are opposed to direct deposit.

Mr. Yvan Loubier: Thank you.

The Vice-Chair (Mr. Nick Discepola): Thank you.

Ms. Redman, please.

[English]

Mrs. Karen Redman (Kitchener Centre, Lib.): Thank you, Mr. Chairman. I appreciate the opportunity to ask a question. I do thank you for the concerns you brought to the table. Other groups have brought concerns.

I'd like to say off the top of it that banks making huge profits is something that has been referenced very often. But I would tell you that I think Canada does well by the fact that banks make huge profits, because well over 50%—as a matter of fact, I think it's almost up to two-thirds—of Canadians are shareholders in banks. So we do accrue a benefit from having a strong financial sector.

However, there are two things I'd like to broach with this group. One is that MacKay suggested a community investment statement be put forward by financial institutions. I'm wondering if there has been any discussion on whether or not, for instance, you offer choice to specific people; whether you look at groups of people, perhaps have them in and show them how to use ATMs, if that were to raise their level of comfort; or whether you have special services for people who perhaps are not literate or have some disability that prevents them from doing that kind of thing. If we were to look at that as being part of the community investment statement, and put an obligation on banks to either say they're doing it or explain why they're not, would that satisfy some of your concerns?

The other issue that has been mentioned is the fact that people who are on welfare often don't have the kind of identification we would ask them to have. There have been several models looked at. One of them is an identification card. There have even been instances in Toronto where they've asked welfare recipients to use fingerprints. I think most of us find that really repugnant. So I'm wondering if there are other solutions you've discussed that would allow people who don't have drivers' licences to get bank access, but which would, again, protect banks. I think legitimately they need protection concerning who they lend money to, but they do have an obligation to offer services to everyone as well.

The Vice-Chair (Mr. Nick Discepola): Maybe if Yvan has his way we will use the voter card for banking services too.

[Translation]

Mr. St-Amant.

Mr. Jacques St-Amant: I would prefer not to discuss this subject. The Industry Committee is presently looking at the protection of privacy. If you don't mind, I will reserve my comments on this. Otherwise, we will be here until midnight.

With respect to the publication of the report on responsibility to communities that was mentioned by the Task Force, this idea is, in itself, very interesting. However, in the Task Force report, it is presented in very general, vague terms. This might become a simple exercise in public relations, and wouldn't be of any good.

I think that it would be a good idea to aim for this, but it would have to be done within a framework on the content of these types of reports. There would no doubt also have to be some type of mechanism that it would make it possible for these to be reviewed in public at some level. The House committee that the member for Saint-Hyacinthe—Bagot was mentioning a while ago might be the appropriate place.

As for the question of identity, we share the concern that you expressed in your preliminary report concerning the Task Force recommendation on the creation of an identity card. We believe that the creation of a specific card for this purpose is not the solution. People have all sorts of different identifiers. The question of identification is very complex. Asking people for a specific piece of identification for a specific purpose is not very realistic or practical. For example, if your card was stolen, you would have a serious problem.

• 1730

Under the present federal regulations, a person requires only one piece of identification to open an account in a financial institution. This brings to mind the regulations concerning benefitting from the proceeds of crime.

The Canadian Payments Association rule G8 deals with cashing federal cheques for people who do not have an account. This rule, which was created subsequent to an agreement between the federal Department of Public Works and the financial sector, states that one piece of identification will be required if it contains a photograph and a signature, and if not, two cards. These requirements are quite acceptable, because our information reveals that the great majority of Canadians, namely, 98%, have two cards.

But in practice, there are presently problems in the field. Some financial institutions require more cards and require specific cards. Everything's fine if you have your passport, for example. It's as easy as can be! But if you are a low-income person who does not or has never travelled, you don't have a passport. You may have your health-insurance card, and you may have lost your social insurance card sometime ago. It can become complicated when there are too many requirements.

Therefore, at the present time the federal legislation makes it possible to open an account with one card, if I remember correctly the amendments that were made last fall. Some laws have been updated recently. If it is good enough for the Department of Justice and the Department of Finance, it seems to me that it should be good enough for the bankers.

Mr. Roger Lagacé: Thank you for your question. Your first question concerned community groups. It would be possible to inform elderly persons, who I represent, and perhaps even to provide them with training.

My association, the Association québécoise de défense des droits des personnes retraitées, has already done this in the past. We organize many meetings per year, that cover such topics as taxation and income. We get help from people in various financial institutions. They introduce elderly or retired people to automatic tellers. We then have a homogeneous group. Everybody knows everybody else, it takes place in the same residence etc. In such a case, it is much easier to do this type of initiation than when you are in the financial institution itself, when people may have to wait 15 or 20 minutes. They get less frightened.

That's part of the solution, but it's not the whole solution. For training to work, people have to consent to participate. When that training is offered and people invited, some come and stay until the end, but others won't stay until the end. Others won't come at all.

Furthermore, many retired people and seniors live isolated at home. They never go out for various personal reasons, and we respect that decision. Others are not interested in that type of training. So we can't reach all the members of my association and all community groups and retired people and seniors.

Thank you.

The Vice-Chair (Mr. Nick Discepola): Thank you.

Ms. Redman, do you have any other questions?

Dr. Bennet, please.

[English]

Ms. Carolyn Bennett (St. Paul's, (Lib.)): I just have one question for Monsieur Sénéchal. In terms of the report you alluded to, I was wondering who commissioned it and who it was for. Obviously we on the committee would be very interested in receiving it.

I chair a subcommittee of HRDC on persons with disabilities, and I was interested in the report. It was something I didn't know about.

[Translation]

Mr. André Sénéchal: It's from the House of Commons.

[English]

Ms. Carolyn Bennett: You didn't give the name of the report. What was the name?

[Translation]

Mr. André Sénéchal: I will explain, Ms. Bennett.

The Vice-Chair (Mr. Nick Discepola): It doesn't come from the House of Commons.

Mr. André Sénéchal: No, no, I will explain.

[English]

The Vice-Chair (Mr. Nick Discepola): It was sanctioned by government assistance, federal assistance, but it's not a House of Commons report.

Ms. Carolyn Bennett: I was wondering if we could enter the name of the report.

The Vice-Chair (Mr. Nick Discepola): You'll get it. The clerk has it, and you can get it after.

• 1735

Ms. Carolyn Bennett: He said it was $4 million. I wondered who paid the $4 million.

The Vice-Chair (Mr. Nick Discepola): The government gives $4 million in assistance.

Ms. Carolyn Bennett: Which group?

[Translation]

Mr. André Sénéchal: I will explain.

One of the previous federal budgets included assistance for disabled people. As usual, regions other than the Quebec region got together. In our case, it was the CAMO, the Comité d'adaptation de la main-d'oeuvre, that was responsible for administering the program. Our role is to find employment for disabled people. I'm sure that a copy was sent to Ottawa. It was done with the funds that you allocate to the regions.

Mr. Yvan Loubier: So it is not a federal report?

Mr. André Sénéchal: No, it is a Quebec report. You must have something similar at the federal level, but this is a Quebec report.

Mr. Yvan Loubier: Ms. Bennett was flabbergasted because....

Ms. Carolyn Bennett: What is the DBSF group?

Mr. André Sénéchal: It is the group that prepared the report for the Comité d'adaptation de la main-d'oeuvre des personnes handicapées.

[English]

The Vice-Chair (Mr. Nick Discepola): And that group is financed with government assistance. That's where the $4 million comes in. Is that clear now?

Ms. Carolyn Bennett: I'm not sure, but I'll rest.

The Vice-Chair (Mr. Nick Discepola): Mr. Guimond.

[Translation]

Mr. Normand Guimond: It's a good example of how we put funds that Canada gives us to good use when we have control over them.

Some members: Ah, ah!

Mr. Yvan Loubier: That's a good lesson for....

Mr. André Sénéchal: That's what I wanted to say, but I was too shy. My friend Normand is less shy than I am.

Mr. Normand Guimond: DBSF, who carried out the research, is a group of consultants. It drafted it to help the committee that was establishing the job creation program for disabled people.

[English]

Ms. Carolyn Bennett: My job is to make sure reports don't sit on a shelf and that we actually do something for people with disabilities in terms of trying to make sure best practices from across the country are shared. So it's not good enough just to have a report, we actually have to know what's in it.

The Vice-Chair (Mr. Nick Discepola): Maybe your HRD committee would want to contact them.

Ms. Carolyn Bennett: Yes.

The Vice-Chair (Mr. Nick Discepola): All right. Mr. Brison, please.

Mr. Scott Brison (Kings—Hants, PC): Thank you, Mr. Chairman.

I thank each of you for your interventions today. It's very helpful to have an understanding of issues for all Canadians in terms of the use of bank services.

The MacKay task force did make very vague recommendations in terms of making a basic set of banking services available to all Canadians, regardless of income level, disability, or otherwise. And this helps us thresh out some of the nuts and bolts, so we can make specific recommendations.

Are you aware of the special needs programs that exist at the chartered banks now? The banks have special needs programs for those who have disabilities or literacy issues. Part of the issue is identification. Would it be beneficial if you were provided with, for instance, a special needs card from a branch that would identify, without any difficulty, and enable one who has a disability or has literacy issues to directly access a teller without a hassle? It's a very simple solution, but has that proposal or idea been discussed? How would you feel about that?

[Translation]

Mr. Jacques St-Amant: On the one hand, it's a fact that most financial institutions, if not all them, have programs to assist these kinds of clients. At times, we have worked with some banks to refine these programs. Unfortunately, these programs are often not very well known, or they disappear.

For example, there was a program that was established in the Jane-Finch neighbourhood of Toronto, where the Royal Bank was very very active in terms of training its staff, especially for providing appropriate services to low-income individuals, of which there are many in that neighbourhood. Everything was just fine until the bank decided to close its branch in Jane-Finch. There are sometimes small adaptation problems and also problems in informing people about these programs.

• 1740

Furthermore, you mentioned having cards that would help identify these problems. We have to be careful. We have to avoid the risk of stigmatizing certain groups of people: that is, these are poor people and we will provide them with certain services. I know that that is not what you want, Mr. Brisson. But that risk exists if that is the direction chosen.

Personally, we don't see why everyone cannot have access to appropriate services.

[English]

Mr. Scott Brison: Actually, what I said specifically—and I was speaking just about those with disability or literacy issues—was about having a special needs card in effect to provide them with ease of service at any major bank or at their bank. I understand that there are special needs services now provided by the banks, but one of the issues is one of identification, so I'm asking whether or not that could help. I'm not talking about specific to low income; I'm talking about those with disabilities, including literacy issues.

[Translation]

Mr. Jacques St-Amant: That risk exists regardless. In order for that type of card to work, one needs people and not automatic tellers. That should also be taken into account.

[English]

Mr. Scott Brison: Okay.

[Translation]

Mr. André Sénéchal: In answer to your question, I'm going to give you an example. There are institutions that deal with disabled people, but financial institutions have reduced their staff. They didn't come to see the disabled people's associations and they don't want to come. Thus, they have cut their staff. They tell an employee to serve in one area and that employee serves just about everyone, including disabled people. What happens?

It's all very well to make promises and to give money, etc., but when I see that the second or third biggest bank in Montreal is not even capable of providing a ramp for disabled people in wheelchairs, I no longer expect anything from financial institutions. I think that you would agree with me. What do we need? We need human beings, people and not machines. Your role is to ensure that there will be people to serve those people. It's as simple as that.

I've never tried to beat around the bush. I face the question and I see the problem. It's happening elsewhere. If it happens in Sainte-Colette, then it's happening elsewhere and probably in Ottawa too.

[English]

Ms. Daren Laine: I want to answer your question.

When I have a problem that I want to resolve with the bank, the first thing I do is phone their 1-800 customer services line, and with all the types of problems I've had, a few of which you've mentioned, I've never heard of this program. I've always been told to go to the customer services of that particular bank, and I've always found it to be a young person who was totally inexperienced and was lost. They don't know which side is up, and they're certainly not well informed themselves. This is where you really need an experienced person to know what's going on, the ins and outs of the bank—what we define as an experienced person—and they give me the impression of putting the least experienced person there. I phoned back customer services and said, “Look who you've given me. I want to make a complaint.” They sent me to the ombudsman. But a complaint is not what I want. I want the service from that person.

• 1745

So the bank is at fault for not respecting the importance of that position. If they're going to go the expense of having that position and putting somebody in that position, then they should have a person who can do the job and do it well.

So I haven't heard of it.

The Vice-Chair (Mr. Nick Discepola): Sure.

[Translation]

Mr. Lagacé, please.

Mr. Roger Lagacé: Sir, the question that you have asked does not provide the solution to all our ills. Providing a category of people with an identity card means categorizing a sector of the population. Some people may like to have a card, but there are many other people who wouldn't, for all kinds of reasons: the Canadian Charter, preservation of identity, preservation of the person, etc.

Second, we cannot emphasize enough today that we absolutely need services provided by people. An identity card is not the solution to the problem. We need people.

[English]

The Vice-Chair (Mr. Nick Discepola): Mr. Brison.

Mr. Scott Brison: The same issues that you describe relative to banking exist in other sectors as well. For instance, there has been a significant move to concentrate the grocery business in Canada, and it has in fact occurred over the last 20 or 30 years.

My family had a grocery store in rural Nova Scotia for almost 30 years and they sold it in the late 1960s. At that time that grocery store would provide everything to people in the community, from Christmas presents to horse feed to a butcher shop to almost anything people in the community would want. Since then, the store has been sold and a number of people have bought the store and have operated it and changed it, and now it's effectively just a shell, it's a convenience store. But that's because people stopped shopping in the way they shopped then.

Banking has kind of changed in that way too, in that people are banking differently and people are choosing to bank differently. Recently there were mergers in the grocery business, for instance, and one report I read recently suggested there would be a 7% increase in grocery prices quite possibly because of the increased concentration.

Have you made similar interventions, for instance, to the government, to the Competition Bureau, on the grocery business? Groceries are certainly as essential to life as banking services, and some would argue even more so. Have you made interventions relative to groceries, or just banks?

[Translation]

Mr. Jacques St-Amant: Not really, at least not in the case of our consumer association, for several reasons. First, people hardly ever complain to us that they cannot buy food. They find some somewhere. They go to the store, they buy what they need....

[English]

Mr. Scott Brison: But they're paying more in some cases because, for instance, in rural communities or in poorer urban communities often the only grocery stores in those areas are effectively convenience stores that are charging people more.

[Translation]

Mr. Jacques St-Amant: You're talking about a market that is very different, and that needs to be taken into account. We therefore hardly ever hear complaints. People succeed in feeding themselves and they have a distinct advantage: they do not need to identify themselves in order to go to the supermarket. There are far fewer conditions and hurdles involved.

It is true that prices vary according to the store, but the produce market is very different from the banking market. Competition works in a very different way. In terms of food, prices are generally set either locally or regionally whereas basic banking charges, such as the monthly cost of an account, are set nationally.

It seems to me that it's difficult to compare markets that are so different in terms of their access, the way prices are set, and the type of competition that exists within those markets. When it comes to buying food, in most municipalities there are a few convenience stores and one grocery store. In Canada, in most municipalities, either there is no institution offering financial services or there is just one.

• 1750

A survey was done. To put things in context, there are about 10,000 communities in Canada. Of those, 2,573 have at least one financial institution. Off the top, then, three quarters of Canadian communities have nothing: neither a bank nor a credit union. In more than half of the 2,573 communities that do, there is only one financial institution. The situation with respect to service points in the market is therefore totally different in the banking sector. It is very different from the food sector or other retail sectors.

Mr. Roger Lagacé: Sir, if I may, I would like to add something to that answer.

Banking hours have been cut back. There have been cuts in services. But you can go to a supermarket anytime you want. If you want to avoid line-ups, you can go at 8 o'clock in the morning, 10 o'clock in the morning or 11 o'clock at night. They are open until midnight and there is no problem. If you don't want to have to wait, you can go when you like and you can choose where you want to go. At banks, you have to use a machine, which is not the case in grocery stores or other businesses.

[English]

Mr. Scott Brison: There's some investigation of proposals by banks now to work with, and in some cases there are banks now working with, the post office system to offer banking to post offices. In fact we see some of the grocery chains introducing banking, like President's Choice banking. Again, that would provide better flexibility in terms of hours. Some banks are arguing that in fact for those with that ATM card, there's never been a wider access of banking services than what exists right now, because you can actually withdraw money at check-out counters.

Many of these changes are being driven by technology, and it's awfully difficult to stop that, even as legislators. But if we work with banks and if banks work with people to make technology more user-friendly...for instance, now the technology exists with ATM machines that can actually recognize someone's face. That is being developed now. An ATM machine can actually, through a camera, recognize somebody's face, and potentially there could be fingerprint and face recognition to access, and you wouldn't put in the number.

Instead of people having to be able to read a screen, if we had a symbol of some sort that would be recognizable to those with literacy issues or disabilities, and they could press the screen, would those address some of your issues? There are so many issues here. Recognizing that technology is not stoppable, can we make it more user-friendly? Is that what we should be doing?

[Translation]

The Vice-Chair (Mr. Nick Discepola): Mr. Sénéchal.

Mr. André Sénéchal: I would like to make a short comment. You mentioned putting service counters in post offices. As you well know, sir, the federal government has closed post offices. There is no point putting service counters in building that are closed; these post offices are closed.

[English]

A voice: It was your government that closed them.

[Translation]

The Vice-Chair (Mr. Nick Discepola): Mr. St-Amant.

Mr. Jacques St-Amant: Thank you.

[English]

As you mentioned, much of that evolution is technology-driven, not demand-driven, and that's a problem.

[Translation]

With respect to post offices, I have two or three comments. That might be a solution where there are currently no services available. It would allow at least for some basic services. But it is somewhat paradoxical. It would be strange to sacrifice the present network, which cost billion of dollars, according to the bankers, in order to invest hundreds of millions of dollars to open something else. In terms of resource allocation, that raises some serious questions.

The other difficulty that arises in that hypothesis is that it is becoming extremely hard to offer banking services; it is extremely complex. The specialists in banks already have great difficulty understanding what they are doing. If we were to ask people working in a post office to continue doing their postal duties and also to understand the banking field, I feel that this might result in some serious problems. As it is, bank employees are not receiving the training they need to be able to respond adequately to complaints and understand the various rules.

• 1755

As was said earlier, the idea of replacing large existing branches with counters in supermarkets may be interesting, but on the condition—we come back to this, we will repeat it and we will go on repeating it—that personalized services provided by human beings be offered. It is not all right to say that a given bank branch can be closed because there is an automatic teller at a nearby supermarket. That does not solve the problem for people. If the branches close, then staff need to be allocated to the supermarket counter, with decent hours of operation, as far as possible.

The Vice-Chair (Mr. Nick Discepola): You have the last word, Mr. Lagacé.

Mr. Roger Lagacé: I would like to mention to the member that the automatic tellers, that is, machines and technology, already exist in Montreal in large stores and even in some smaller stores, like corner stores. Some store chains are already equipped with them.

However, when you go to those places, you do so by choice. No one has forced you to go there and no one has to familiarize you with the machine or teach you how to use it. People have no choice about going into financial institutions; we have to go there. That makes a big difference.

As well, the people who use them are not the same age. Generally speaking, older people do not go to automatic tellers in the corner store or the large stores. People have to go to the bank. There is no choice, and it causes stress and anxiety for people. In the long run, it tells on people's health.

The Vice-Chair (Mr. Nick Discepola): Thank you. Mr. Sénéchal.

Mr. André Sénéchal: This is the last time I will speak.

At an automatic teller machine, in an old people's home.... I should tell you that I work with retired people. There are six people waiting while the older person talks with the teller. One of our members was there and found out that the person was making one transfer of $30,000 and another of $60,000, because confidentiality was not respected. The six people waiting in line heard that the person had withdrawn $30,000 and $60,000. I mentioned that incident in the document I provided to you. I do not know if you will have it translated, but I gave you the information in the document and it is true.

So some attention should be paid to confidentiality in financial institutions.

I will conclude by telling you that there is often some good samaritan ready to help an older person. In truth, that person may use the opportunity to obtain a card number, etc. The majority of them don't, but they are often the ones who use the cards and steal money. In dealing directly with tellers, there is at least the advantage of being able to trust them.

The Vice-Chair (Mr. Nick Discepola): Thank you. Mr. Loubier, we have a vote in the House at 6 o'clock. I would therefore ask you to be brief.

Mr. Yvan Loubier: I just have one question.

Has your coalition already met with the Canadian Bankers Association concerning your recommendations? I am asking that merely out of curiosity.

Mr. Jacques St-Amant: Formally, no. There are member organizations of the coalition, such as Option Consommateurs, which have fairly frequent contact with the Canadian Bankers Association, especially on the issue of access. We have been working on these issues since 1993, including with Mr. Hébert, who used to be here.

The Vice-Chair (Mr. Nick Discepola): Madam Hurteau-Farinas, please.

Ms. Thérèse Hurteau-Farinas: Continuing in the same vein as the last speaker, I would like to add that it is not only older people who are affected by those problems. There are also young women who find it difficult to use automatic teller machines. If a young mother has two or three children with her, we know that she would prefer to go to the teller than to the machine.

We should not simply put older people in one category; in all age groups, people need personalized service. That is worth pointing out, because it wasn't really touched on. I therefore want to make it clear that people of all ages need personalized service.

The Vice-Chair (Mr. Nick Discepola): Thank you. The last word goes to Mr. Vaudreuil.

• 1800

Mr. François Vaudreuil: In coming here this afternoon to talk to you about this issue, we had three objectives.

The first dealt with the need for every person in Canada to be able to open a bank account. You have seen that, despite the agreement between the government and the Canadian Bankers Association, there are major problems out there every day in this area and not everyone is able to open a bank account.

Our second objective was to ask you to ensure that everyone had access to personalized services. There again, we gave you examples of people with literacy problems, of elderly people, of people requiring assistance and the lack of confidentiality. Even though the banks have adopted certain codes of conduct, it is clear this is not really working.

The other objective involved banking charges. The institutions clearly want to discourage people from choosing to use personalized services rather than the technology, since the charges are higher. We feel that there should be equal treatment and that both types of service should cost the same.

We find that things are not working very well out there on a day-to-day basis, despite a sort of self regulation through codes of conduct or agreements between the government and banks.

Not being able to open a bank account is a violation of a person's dignity. In a free and democratic country like Canada, can we accept that people would not have the right to open a bank account? The answer is obvious: no.

I think that even though the banks present an image of being excellent corporate citizens, when they appear at press conferences or here before this committee to explain that they have adopted policies to help those with literacy difficulties or that they reached an agreement with the government in 1997 to allow people to open bank accounts, they are in fact trying to clear their conscience and improve their corporate image. In practice, self regulation is not working.

The government absolutely must legislate, regulate and force the banks to toe the line. The culture in bank branches goes against helping the poor and marginalized. As we say in Quebec about people on welfare: no one bothers with them.

I am sorry to have to tell you that this is unacceptable, that this approach does not respect human dignity. We cannot accept it and that is why we are asking the government to legislate, so that the three objectives we have outlined can be achieved in everyday life. The aim is also to change the existing culture in bank branches and have business practices match the rhetoric spun out by the big banks in conferences and places like this.

Thank you, Mr. Chair.

The Vice-Chair (Mr. Nick Discepola): Thank you so much, Mr. Vaudreuil.

If you take the time to read our recommendation 90(b) and the following recommendations, which Mr. St-Amant referred to in his presentation, you will see that they are in keeping with two or three of the measures you proposed, including ensuring that institutions give people access to basic services at reasonable costs.

You also raised other ideas today and I would like to thank you on behalf of the committee. It gives us more food for thought. I hope that our recommendations will indeed lead to action on the part of the banks. Our work is certainly not over and we will continue to put pressure on them.

On behalf of the members of the committee and myself, I would like to thank you sincerely, in particular for making the effort to come here. I wish you a good trip back to Montreal tonight.

• 1805

The meeting is adjourned.