FINA Committee Report

Bloc Québécois Supplementary Opinion

While the federal government has been growing at an unprecedented rate since the pandemic, there are many examples of inefficiencies, contracts out to firms like GCStrategies, Accenture and McKinsey, and issues providing basic services. On top of that, Ottawa has the nerve to tell the provinces and Quebec what they should do, and worse, to directly meddle in their areas of jurisdiction using money collected, thanks to the fiscal imbalance.

The federal government isn’t taking care of its own business, but it created a dental plan that combines the worst parts of public-private partnerships. The Trudeau government isn’t taking care of its own business, but it is creating a pharmacare program that’s out of touch with Quebec’s needs. It has also slowed down housing transfers to Quebec, which stepped in when the federal government backed out of social housing in the 1990s. Its last-minute involvement doesn’t give it the authority to tell others what to do. Just because this government is nearing the end of its mandate and is uninspired doesn’t mean it’s going to gain anything by throwing its weight around with the Quebec and provincial governments.

As the Parliamentary Budget Officer (PBO) says every year, the federal government has much more flexibility than the provincial and Quebec governments, despite the fact that there will be more Old Age Security recipients. Why is that? It’s because the federal government has virtually no recurring spending, apart from transfers to individuals, provinces, territories and Quebec. It doesn’t have to be as efficient with management because, without new spending or new revenues, the federal government will pay off its entire debt (and not just its deficit) around 2058, according to the PBO. In late November, the Tax Justice Network reiterated that Canada is lagging behind when it comes to collecting money from ultra-rich individuals and multinationals that exploit loopholes in our laws to use tax havens. Canada was already the 12th-worst tax haven in the world. As of 2024, it is ranked 5th. Worse yet, it is one of the eight countries preventing the UN from developing a framework for international cooperation to curb tax havens. By using its powers to close the tax haven loophole, it would have the money to take care of its own business, including transferring the sums Quebec and the provinces are requesting for health care, reforming employment insurance, and increasing pensions for seniors aged 65 to 74.

The government is running out of steam at the end of its mandate. At the time of writing, the date of the economic and fiscal update, usually given in fall, had not yet been announced. The bills following its last budget announcements on capital gains and the “Canadian Entrepreneurs’ Incentive” have still not been tabled. Parliament is stalled, and the government doesn’t seem to mind.

We supported only what was good for Quebec and what fell under federal purview. We also opposed the government’s efforts to turn open banking into a new form of predatory federalism by forcing the provinces to give up their powers over consumer protections and securities. The main effect of the framework set out in Bill C-69 is to push Quebec and the provinces out of the financial sector when financial institutions interact with their clients using technological platforms. In practice, the Quebec Consumer Protection Act or the Quebec Act respecting the protection of personal information could stop applying to financial institutions for all their activities involving open banking. By using its power over the banks to regulate all the companies that interact with them, Ottawa is trying to squeeze Quebec and the provinces out of the financial sector. What an overreach! The Bloc Québécois has long called for an open banking system, but it has to be done right. And that’s not currently the case. A clear framework is needed, with clear obligations and clear responsibilities, as well as mechanisms and institutions to ensure that everyone is able to fulfill them.

We find it distressing that the Committee has accepted recommendations to this effect. Here are a few examples:

• to tie federal housing funding to a five-year moratorium on rent increases beyond inflation targeted at temporary rent control across the country;
• to establish a secretariat or federal department of construction;
• to provide proportional funding for official language education, in English and French, to meet the influx of newcomers to Canada;
• to continue to fund the Financial Consumer Agency of Canada to support its new mandate of overseeing the open banking system framework; and
• to establish an industry advisory committee, including credit unions, to ensure that the sector’s needs are communicated and taken into account as the Financial Consumer Agency of Canada assumes its new mandate of overseeing the open banking system framework.

In conclusion, although the majority of the recommendations we submitted were adopted by the Committee, here are a few that we would have liked to see added to the report, until Quebeckers decide to regain full control over Quebec’s affairs:

• to mitigate the impact of higher capital gains by expanding the new “Canadian Entrepreneurs’ Incentive”;
• to introduce a death benefit for Guaranteed Income Supplement recipients; and
• to eliminate or limit the taxable capital gain on the gift or low-price sale of certain farm assets to a nephew or niece.