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FINA Committee Meeting

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[Recorded by Electronic Apparatus]

Tuesday, March 20, 2001

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The Chair (Mr. Maurizio Bevilacqua (Vaughan—King—Aurora, Lib.)): I'd like to call the meeting to order and welcome everyone here.

As you know, today's order of the day is Bill C-8, an act to establish the Financial Consumer Agency of Canada and to amend certain acts in relation to financial institutions. As everyone knows, we're doing clause-by-clause.

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You probably also know that we have close to 600 clauses, so just relax and this is going to go smoothly. We've ordered breakfast for everybody.

I'd like to welcome representatives from the Department of Finance and from the Office of the Superintendent of Financial Institutions Canada. I guess there's going to be somebody from both of these groups quarterbacking the great bench strength that exists on this list. Maybe we could have four or five of the individuals come up, and then, as we deal with the various clauses, perhaps bring the experts up as well.

Are all the members ready to go?

Mr. Epp.

Mr. Ken Epp (Elk Island, Canadian Alliance): Mr. Chairman, I'd like to begin this session by asking you to please not go blurrp, blurrp, blurrp, yes, yes, yes, yes, yes, like a bull through a china shop. Be reasonable. We'll work with you, but when we come to the various amendments, we'll want to ask some questions and we don't want to be asking for unanimous consent to go back ten points because you're already past there.

That's a special request.

The Chair: That is a request that I will—

Mr. Lorne Nystrom (Regina—Qu'Appelle, NDP): How do you spell that word?

The Chair: Request?

Mr. Lorne Nystrom: No, blurrp.

The Chair: I think they're having trouble translating that one.

Mr. Ken Epp: Yes, they would have trouble translating that. I want to see how they write that up in the official record.

The Chair: But they will, and it will be your quote.

Mr. Ken Epp: Okay, you know what I mean.

The Chair: Pursuant to Standing Order 75(1), consideration of clause 1 is postponed.

(Clauses 2 and 3 agreed to)

(On clause 4—Appointment of Commissioner)

The Chair: We have an amendment to clause 4 from the New Democratic Party, amendment NDP-1. Mr. Nystrom will explain to us exactly what the purpose of this amendment is.

Mr. Nystrom.

Mr. Lorne Nystrom: First of all, it's a very reasonable amendment, which I'm sure everybody here can support.

As we know, this legislation creates a Financial Consumer Agency, and the legislation reads:

    The Governor in Council shall appoint an officer to be called the Commissioner of the Financial Consumer Agency of Canada.

In other words, the minister appoints the commissioner. With my amendment, the Governor in Council—in other words, the minister—“shall appoint, after consultation with the Standing Committee of the House of Commons on Finance, an officer....” In other words, that appointment is made after consultation with the finance committee. It's a small, modest, timid step towards more parliamentary democracy, and I don't see anything wrong with that. If we are to be parliamentarians serving our duty, we should have some input over the appointment of somebody important to head up this new consumer agency.

I think that's a natural role for a parliamentary committee. The minister still has the final say, but he has to consult with this committee ahead of time. Why don't we empower ourselves a little bit more?

The Chair: Mr. Cullen.

Mr. Roy Cullen (Etobicoke North, Lib.): While I respect where the member is coming from in the proposition he has put forward, it seems to me that would lead us to more of an American-style system.

Right now, we have a number of regulators. For example, in regard to the Superintendent of Financial Institutions, what is proposed here is the same as the appointment process for that particular position, where we use an open process, including gazetting and ads in national papers, and the usual process. So for that reason, I would hope that we wouldn't support the amendment, however well-intentioned it might be.

The Chair: Mr. Epp.

Mr. Ken Epp: I would like to speak to this amendment as well.

It seems to me that for the parliamentary secretary to just let it roll off his shoulders, saying this is like the Americans, and therefore it must be wrong, first of all is a very tacit assumption that I think doesn't bear the weight of usual rules of debate and logic.

Secondly, I detect that the parliamentary secretary, by doing this, has just given notice to all the members over on that side on how they're to vote here, based on instructions from the minister. I think that, too, is a bit of a violation of the rules of debate. I really think we should restrict this in the committee to letting us put forward our arguments. If the arguments carry the day, then let the members use their heads to see whether they should support the motion, instead of having this.

It's an argument I'm going to continue to make: that the finance committee, as well as other committees, should have greater freedom to express themselves. He has expressed his opinion, but I think perhaps the members are going to read into that a great deal more. So I'd just like to have that clarified.

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The Chair: Thank you, Mr. Epp.

Ms. Barnes.

Mrs. Sue Barnes (London West, Lib.): I think the honourable member who has just spoken makes an awful lot of assumptions, some of which, in my case, are true. I think I have a brain of my own, and around this organization and around the government—and I've been here since 1993—GIC appointments are reviewable by the committee. Under the auspices of the steering committee of any committee, we can review after the fact, having granted the appointment. That seems to have worked since I've been here. It's done on occasion, and it's done at the will of the committee. I would propose that we continue on in that order.

The Chair: Okay.

Mrs. Sue Barnes: I would be voting in that manner.

The Chair: Mr. Brison.

Mr. Scott Brison (Kings—Hants, PC): Mr. Chair, I'm supportive of the amendment. “The Governor in Council shall appoint, after consultation with the standing committee” certainly doesn't imply an American-style appointment process. It's simply a consultation with the standing committee. I would hope that other members would see this as being a positive amendment.

The Chair: Mr. Cullen.

Mr. Roy Cullen: As a general comment, these amendments were made available to all the members of the committee about ten or fifteen minutes ago. So if the members opposite really wanted these to have a strong consideration, I would have thought they would have made them available earlier. But the comments I make are my own, and the committee members are free to vote as they wish.

The Chair: Mr. Nystrom.

Mr. Lorne Nystrom: On that point, if the members are more comfortable having the vote deferred for a while, we can do that. We can debate the merits of this and vote on it a bit later on, if people need more time to consider it.

It's not a very radical proposal, and just because some other commissioners are appointed doesn't mean we have to do that with this particular commissioner as well. We can go in our own direction. I don't see it as an Americanization of the system; I see it as a democratization of the system.

The Chair: Thank you, Mr. Nystrom.

Mr. Cullen.

Mr. Roy Cullen: The restructuring of the financial services sector has been under way for four years. I don't think having further delays is in the best interests of Canada or all the stakeholders who have been before this committee, so I would vote against any further delays.

Mr. Lorne Nystrom: I'm not talking about a delay. We would just postpone a couple of them and vote on them a little bit later on—today, or whenever. It won't take any more time doing that at a later hour than doing it now.

That's only if people want to do that. I don't care one way or the other.

The Chair: Shall I call a vote?

An hon. member: Call a vote.

(Amendment negatived)

(Clause 4 agreed to)

(On clause 5—Powers, duties and functions of the Commissioner)

The Chair: We have a government amendment on clause 5, amendment G-1.

Mr. Roy Cullen: The English version mistakenly refers back to subclause 5(2) instead of subclause 5(3), and provisions in both languages fail to refer to the commitments mentioned in subclause 5(3).

For the edification of the committee, commitments include things other than codes, such as the memorandum of understanding with the banks on the low-cost accounts. So this should be put in as an important housekeeping change.

(Amendment agreed to) [See Minutes of Proceedings]

(Clause 5 as amended agreed to)

(Clauses 6 to 62 inclusive agreed to on division)

(On clause 63)

The Chair: The Bloc Québécois has an amendment in our booklet, amendment BQ-1, on clause 63.

Mr. Loubier.


Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): Mr. Chairman, this afternoon, the Bloc Québécois is tabling a series of amendments, 60 in all, to the financial institution reform bill. The amendments deal mainly with discrimination against mid-range banks. In other words, the 60 amendments are designed to ensure that mid-range banks—those with between $1 billion and $5 billion in equity—are on an equal footing with larger banks in terms of ownership rules.

Allow me to explain in a bit more detail. What I'm about to say applies to all 60 amendments.

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The MacKay report suggested amending ownership rules by creating three categories of banks or other types of financial institutions. The first category would cover large banks. In this category, it was planned to increase the total allowable percentage of voting shares held by one person from 10% to 20%, whereas 80% of shares would be widely held. This means they would be widely held by Canadians. Increasing from 10% to 20% the percentage of voting shares in major Canadian banks that a single individual may hold is in itself a fairly major change to the Bank Act.

The second category—this is the one that concerns us most—covered mid-range banks. These banks have between $1 billion and $5 billion in equity. This is where it gets quite worrying. Not only is the percentage of voting shares that a single individual may hold in a large bank being increased to 20%, but this same percentage is being increased to 65% for mid-range banks. This means that one individual could own 65% of the voting shares of a mid-range bank. This idea becomes even more worrying when you look at the structure of the banking system in Quebec and in Canada in general. When you look at this system you see that this provision directly affects the National Bank, whose equity puts it in the mid-range bank category.

In light of this new provision, the following question arises: why is the National Bank, which is Quebec's largest bank being treated differently from the Royal Bank, which is Canada's largest bank? Why is it that one individual may own up to 20% of voting shares in the Royal Bank and 80% of shares in this bank are widely held, whereas in the case of Quebec's largest bank, one individual may own 65% of voting shares, and only 35% of shares are widely held?

The many statements by the Minister of Finance, who testified to this committee, have provided no answer to this question. Try as I might to lay out my arguments against this proposal to him, he was not forthcoming with clarification or a clear reply. His only argument was the following: he said that on the basis of demands from industry and his own analysis, allowing one individual to own 65% of voting shares would make the National Bank more flexible.

How can you increase flexibility by creating rigidity in shareholding rules? How can flexibility be improved by allowing one person to hold 65% of voting shares, when 35% of voting shares will be widely held? This measure simply makes for a more rigid system. It creates a situation where there are a few shareholders and a single shareholder holds not only 50% plus one of voting shares, but 65%. Indeed, why is this percentage being raised to 65%? The reason given was that it is based on some type of legal precedent in the West. However, this is the not the issue at hand, this is not the issue.

The minister gave us a second reply and, once again, I was left wanting. He said that this would improve the National Bank's opportunities for capitalization. But where is the difference between one person holding 65% of shares and 65 people holding 1% of shares in terms of capitalization opportunities? When has the National Bank or any other mid-range financial institution had difficulties in finding capital for its projects?

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No reply was forthcoming on this issue either. This issue is such a serious one, Mr. Chairman, that last week—11 days ago to be exact—the board of directors of the National Bank adopted a policy against any hostile takeover bids on the bank. The bank has protected itself against hostile takeover bids but there are still no valid criteria or assessment criteria in terms of the transfer of ownership of shares in banks, which are not considered as hostile takeover bids. For example, one individual may hold over 20% of shares in the National Bank. There is no legislative provision for these types of criteria to provide protection against non-hostile takeover bids, compared to hostile buy-out bids against which the National Bank has adopted a policy.

All our amendments deal with this concern. We have endeavoured to clear the bill of any distinction between large and medium-range banks or other types of medium-sized institutions. By medium-sized we mean those institutions with equity of between one and five billion dollars. The National Bank, for example, would be placed on an equal footing with the Royal Bank in terms of ownership rules. There would be no discrimination.


The Chair: Are there any comments? Mr. Cullen.

Mr. Roy Cullen: Thank you, Mr. Chairman.

To the member opposite, the proposals you are making basically fly in the face of the whole underpinning of the new financial services sector framework that has been proposed in the bill and has had extensive consultation. The ideas behind the ownership regime are to actually differentiate between sizes of banks and to say the large banks will remain widely held, while increasing the flexibility for them to enter into joint ventures and strategic alliances so that they can grow their businesses and, as a result, be stable and provide consumers with the kinds of choices that are needed.

The middle range of banks are still required to be widely held. However, a bank like the National Bank could come forward with a request to be closely held, and the minister would then review that request on its merits. He has communicated to the former finance minister of the Province of Quebec, Monsieur Landry, who is now the premier, what guidelines he will use in terms of regional economic interests, location of head office, impact on employees, etc. If the National Bank, for example, came forward with a proposal, presumably it would be in their interests to do that, and the minister would then make an adjudication.

The effect of all of your amendments is to basically work counter to the ownership regime and the tiering that are really the underpinnings of the bill, and which have been the subject of wide consultation and generally have wide stakeholder support.

I'm also under the impression that, as a consequence of all the amendments you've put forward, the banks would be able to get into car leasing at the retail level, and perhaps insurance at the retail level as well. It may not be an intention of the member, but I'm advised that would be a consequence. I'm not sure that at this point the committee, or at least the members on this side of the House, would be supportive of that. That may be a technical glitch you're not aware of, Mr. Loubier, but I'm advised that it might be a consequence.

I'd like to come back to the general premise of your amendments. They run counter to the thinking of the government, and they run counter to the thinking of the stakeholders who have been consulted on this. For those reasons and other reasons, I certainly will be voting against them.

If all the amendments are of the same generic type, Mr. Chairman, I wonder if we could perhaps...if we vote on one, maybe we should vote on them all as a block.

Mr. Loubier, were you saying they were all the same?


Mr. Yvan Loubier: Mr. Chairman, the parliamentary secretary has said that he will vote against our amendments but he has been unable to adequately justify his decision. There is nothing in our amendments which would allow banks to sell insurance or get into leasing. I don't know where he sees that it would. It's very strange. Mr. Chairman, our amendments simply get rid of one bank category.

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Instead of the proposed 65%-35% split in voting share ownership among medium-range banks—one person holding 65% of voting shares and 35% of shares being widely held by Canadians—what we are proposing is that the National Bank and other mid-range banks be placed on a level playing field with large banks. In a nutshell, single ownership should be limited to 20% of voting shares and 80% of voting shares should be widely held.

Indeed, this is the mainstay of financial institution reform. If the National Bank is put on the same footing as larger banks, we will be satisfied. That does not change the pillars of financial institution reform. All it does is ensure that mid-range and large banks are placed on an equal footing.

I would like to point out to the Secretary of State—and perhaps he has forgotten, he doesn't know or never in fact was aware of the fact—that Mr. Ducros, the vice-chairman of the McKay committee wondered why this distinction, which he would not have made, had in fact been implemented. In his opinion, this distinction had no impact on capitalization opportunities for mid-range banks.

Mr. Chairman, one other thing concerns me. The Secretary of State has said that wide consultations have been undertaken and that this process would continue. He said that even Mr. Landry or Ms. Marois, who is now the Finance Minister, will be consulted. I would like to point out to the Secretary of State that last June, the Quebec Minister of Finance, Mr. Landry, wrote to Mr. Martin to raise his concerns on the changes in ownership rules. He suggested that measures should be taken for wide-scale protection. Let me be clear on one thing, we are not against the overhaul of financial institutions as it stands in the bill. Quite the opposite, we support it. I would like to remind you, Mr. Chairman, that we have even appeared as witnesses advocating speedier action. We have said that in light of the major changes in the international financial sector, we are lagging behind. We said that we had to proceed more quickly to ensure that the Canadian financial sector would be in a position to address international competition in the world and domestic marketplace.

However—and that's what Mr. Landry said in his letter to Mr. Martin—he requested that public interest be taken into account as a way of providing a better feeling of security in terms of ownership for a bank such as the National Bank. In the case of the National Bank, for example, I would like to set out the criteria that should be used in considering public interest. I think that it's a worthwhile exercise. Mr. Landry said that in terms of public interest and the National Bank that more precise criteria than those in the bill that we are dealing with, should be established:

    the effect of the change on the operations of these banks, including available services; the impact of the change on jobs, both at headquarters and at branch level, including executive-type positions or jobs requiring special skills; the impact of the change on the Quebec economy and on technological development in Quebec; the impact of the change on the Quebec financial sector and on Montreal's role as a financial centre, in particular, in terms of retaining final decision-making authority in Montreal.

Mr. Landry stated that any transfer in share ownership at the National Bank should be assessed on the basis of these four criteria. Consequently, if there is to be any type of co-operation, perhaps a reply to the letter by the former Finance Minister, who is now Premier of Quebec's, should be forthcoming. The government maintains that its reply was the re-tabling of the bill after the election. In various press releases, the Minister of Finance set out a list of regional criteria and the impact of the Finance Minister's policies on ownership. But we find that insufficient.

There have to be legislative safeguards. There are several ways of doing this. Firstly, any reference to medium-range banks in the bill should be removed, or criteria should be added to the bill. This should be done in such a way as to give us a better feeling of security. Is there a way of providing this security, without getting into tales about leasing and insurance? That's not the object of the exercise. Our amendments have nothing to do with this issue. All we are trying to do is to eliminate any discrimination between large and medium-range banks.

I'd like to point out to the Secretary of State that the Secretary of State for International Financial Institutions had even pointed out that it would be possible to include these criteria in the bill. The Secretary of State in question, Mr. Jim Peterson, had even initialed each of the four criteria laid out by Mr. Landry. He had made them more Canadian, if you like, by replacing, for example, "the impact of the change on the Quebec economy", by "the regional economy, the regions". We were satisfied with that. If he had included that in the bill, there would have been no problem. However, he failed to do so. However, he put his signature to the criteria. That's what I call going back on your word. In any case, I've already told him what I think and when he returns, I will reiterate it. However, all that has nothing to do with leasing or selling insurance. Indeed, we have always opposed banks getting into these areas. All that we want is a level playing field.

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Mr. Cullen, I can accept that you disagree with our amendments, but give us some good reasons why.


The Chair: Are there any further comments? No? Then we'll now move to the vote.

Mr. Roy Cullen: Mr. Chairman, if all the Bloc's amendments are the same theme, is it possible to vote on them at the same time?

The Chair: The amendments numbered BQ-2 to BQ-29 inclusive are consequential to amendment BQ-1, so a vote on BQ-1 will apply to amendments BQ-2 to BQ-29 inclusive.

Mr. Roy Cullen: Okay, thank you.

(Amendment negatived)

(Clauses 63 to 97 inclusive agreed to)

(On clause 98)

The Chair: For clause 98, we have amendment G-2, from the government.

Mr. Roy Cullen: Mr. Chairman, proposed section 378.1 extends the application of specific sections in the act to banks with under $5 billion in equity that were previously named on schedule 1, such as the National Bank. This amendment adds omitted reference to the transitional provision in proposed section 376.01, institutions that grow through $250 million. So it's to clarify the transitional....

The Chair: Mr. Epp has a comment.

Mr. Ken Epp: We're talking about transition here. I probably missed this during the previous hearings of the committee, but I would like to have just a brief explanation of where in the bill these transitions are covered, and exactly at what stage a major bank comes into existence after having been a minor bank beforehand.

The Chair: We can ask the officials. Mr. Salembier.

Mr. Gerry Salembier (Acting Director, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance): Thank you, Mr. Chairman.

The provision we're talking about here is in respect of a limit of $500 million, below which a bank is not subject to the rule saying that for the non-controlling part of the share ownership no one may own more than 20%. Normally, if a bank owns another bank, the bank has to control that bank underneath it, and the remaining share ownership must be held no more than 20% by any other individual. The provision we're talking about here sets out an exemption to that requirement below the $250 million threshold.

It may be that a bank below the $250 million threshold grows through that $250 million threshold. If so, we have set out in the legislation in all other respects that there is a transition period provided—a transition period of three years, I believe it is—for the bank to come into compliance with the requirement that no more than 20% of the non-controlling share ownership be held by one single individual.

The amendment here is really just a housekeeping amendment, because there was one section that was missed when we were redrafting the new version of the bill.

Mr. Ken Epp: So it's all in place except for this one omission, is that what you're telling us? Yes? Okay.


The Chair: Mr. Loubier.

Mr. Yvan Loubier: Mr. Chairman, I had forgotten that we could question the senior officials. Mr. Cullen said earlier that the amendments that we have tabled and which have been voted down for the reasons he gave, could allow banks to get into leasing and the sale of insurance. Could you tell me where and how that would be the case? I had completely forgotten about you. I was arguing the issue with him, but come to think of it, how would my amendments, which would eliminate an ownership category for a medium-range bank, enable banks to sell automobile leasing or insurance? Could you explain that to me? That's what Mr. Cullen said.

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Mr. Gerry Salembier: If the member does not mind, I'd like to reply in English.


There is a provision in the act that prevents a bank from becoming a major shareholder in a company that owns auto leasing—non-permitted leasing operations, which are, in effect, auto leasing. Three of the amendments proposed by the Bloc Québécois would have eliminated that restriction on banks' ownership of companies that are involved in auto leasing.


Mr. Yvan Loubier: Not at all, Mr. Salembier, because as long as operations are separate—it's allowed—a bank may own a financial company, which sells insurance or leasing services. If the bank and the financial company are completely separate entities, currently, the bank may own the financial company. Indeed, there are banks who already do so. Our amendments will not lead to this situation, because it's already a reality. What we are trying to do with our amendments is to do away with one ownership category so that the National Bank will be placed on an equal footing with the Royal Bank.

Mr. Gerry Salembier: I understand that the amendments tabled by the Bloc Québécois were designed to eliminate one of the ownership categories, but what I'm saying is that your amendments would do away with much more than that. Your amendments would lift the prohibition that exists on non-permitted operations in the area of leasing.


It is true that banks do have the ability to own insurance companies. It is not true that they have the ability to own companies in non-permitted auto leasing activities.


Mr. Yvan Loubier: Mr. Salembier, which of the amendments that I have tabled would lead to that situation?

Mr. Gerry Salembier: I can give you the number of the amendments. We received the amendments at the same time as the members of the committee.

Mr. Yvan Loubier: I'm intrigued. That's fine.


The Chair: Do you want me to continue, Mr. Loubier, or are you going to...? Is that fine?


Mr. Yvan Loubier: I'll wait for the amendments.


Mr. Roy Cullen: On the amendments that you put forward, numbered BQ-21, BQ-43, and BQ-44, the information I have is that they would have perhaps the unintended consequence of allowing banks to get into auto leasing.


Mr. Yvan Loubier: Mr. Chairman, just a second.

Mr. Cullen, does that mean that if we withdrew these three amendments, you would support the rest and that you would vote for the others?


Mr. Roy Cullen: No, Mr. Chairman.


If you've listened to what I've already said, I maintain that what you are proposing flies in the face of the very important tenets of this bill.


I said that was the primary objection, but another consequence of your amendment would be to allow banks into leasing, which I don't think is something we would want to support.

For the record, Mr. Chairman, I would just like to point out that I think we're out of order. I'm prepared to carry on, but I think we've already voted on those amendments, or we will be coming.... That's fine, we're just coming to BQ-43 and BQ-44.


Mr. Yvan Loubier: No, but we can come back to that later. I would just like some clarification because I don't like being led up the garden path.


The Chair: It was my understanding that he was asking a question for clarification, nothing else.

Mr. Epp.

Mr. Ken Epp: I have a question with respect to this.

I was of the understanding that this legislation prevented a bank from owning subsidiary companies that got into the business that is specifically not permitted in this legislation. Is that not true? Can banks now buy subsidiary companies that do what the banks themselves are not permitted to do?

Mr. Gerry Salembier: No.

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Mr. Ken Epp: I didn't think so. So you're going on record and assuring us that this is the case. I don't have the time now to find that part here. Do you know offhand where that is prohibited?

The Chair: Mr. Cullen.

Mr. Roy Cullen: Mr. Chairman, if I may, I'll comment.

Under this legislation the banks and other institutions will have the capacity to set up holding companies and subsidiaries. One of the problems you have now is that anything having to do with banks is subject to the huge regulatory regime the banks operate under. Now they'll be able to set up subsidiaries. There will be be permitted and non-permitted types of investments, but this will allow the banks to grow their business in a way they can't right now.

I'm not sure what your question....

Mr. Ken Epp: Specifically, my question is, will a bank now be able to create a new subsidiary or holding company that sells insurance, cross-reference their databases, and do all these things we were concerned about? Will they be able to do this under this legislation?

Mr. Roy Cullen: The banks own insurance companies right now. What is prohibited under both the current regime and this regime is for banks to sell insurance at the retail branch level. This legislation in fact further prohibits the banks from networking insurance and leasing products at the retail branch level.

Mr. Ken Epp: Okay.

The Chair: Mr. Harris.

Mr. Richard Harris (Prince George—Bulkley Valley, Canadian Alliance): It's our understanding that banks are prohibited from retailing insurance products or leasing cars through their branches. They are also prohibited from exchanging database information with any of their subsidiaries. But it's my understanding that the banks are quite free to own and operate a stand-alone business such as an insurance company—which they already do—and an auto-leasing company so long as they don't share their database information. That's my understanding of it, Mr. Cullen.

Mr. Roy Cullen: Mr. Chairman, any coercive, tied selling has been expanded to include.... If companies decide to elect for a holding company regime or, within the parent, a subsidiary regime, any coercive tied selling is not allowed. This exclusion is extended to the full range of products that might ensue.

In terms of your specific question about the stand-alone company, did you say leasing or insurance products?

Mr. Richard Harris: Either. Insurance products and auto leasing, so long as they don't share—

Mr. Normand Bergevin (Director, Legislation and Regulations, Office of the Superintendent of Financial Institutions): A bank can own an insurance company. It can't sell insurance in its branches, there are restrictions on the sharing of information, and a bank cannot lease cars to customers. They can own a financial leasing corporation, but that corporation cannot do car leasing. Car leasing is prohibited. A bank cannot issue a lease for any vehicle under 23 metric tonnes.

Mr. Ken Epp: There's an important question here that I don't think has been addressed. If such a holding company exists, suppose it so undercut the competition that everybody came flocking to it. What would happen if by doing so it incurred substantial losses? Could the parent bank cover those losses by diverting its own profits into the holding company or insurance company?

Mr. Roy Cullen: I'll let the officials answer, but if it's a financial type of company, it has to be controlled by the holding company. OSFI, which is the regulatory agency concerned about prudential issues, would have the regulatory power to ensure that the whole hangs together as a piece and that it's sound and secure. If the officials want to expand on—

Mr. Ken Epp: But you haven't answered my question.

Mr. Roy Cullen: I think I have, but....

Mr. Ken Epp: I don't think you have.

Mr. Gerry Salembier: I think there are two questions which are mixed up. One concerns the bank holding company model and whether that structure, which will be permitted under this new act, will provide opportunities for the banks to circumvent the prohibitions against things like insurance networking and ownership of auto leasing companies. The answer to that question is no, it will not.

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Your other question concerned whether or not the insurance holding company structure provides opportunities for the banks to flow assets back and forth between the bank and its subsidiaries or at the holding company level in such a fashion as to imperil the safety and soundness of the institution. On that one I would ask Mr. Normand Bergevin from OSFI to respond.

The Chair: Mr. Normand Bergevin.

Mr. Normand Bergevin: First of all, any reorganization under a holding company or any arrangement that would formalize this reorganization would have to be approved by the minister, that is, it would have to be approved by the government.

Now, given this situation, let's suppose that a bank has reorganized and that you have a holding company with a bank and an insurance company under it—just to simplify things because you may have hundreds of subsidiaries, but let's stick to those two. The holding company will become a related party of the bank for the related-party regime of the act, so any money flowing between the bank and the holding company would be subject to whatever rules we have in the act for transactions with related parties.

That's not to say that the bank can't pay dividends, but we have now put an extra provision in Bill C-8 that says if unduly large dividends are being paid by the bank to the holding company—or even by the insurance company, if it's federal, to the holding company—the declaration of that dividend will have to receive approval from the superintendent. But a dividend must be fairly big to be defined as a large dividend.

The Chair: Mr. Ken Epp.

Mr. Ken Epp: I'd like to propose a specific example. Suppose there's a small town with two car rental agencies. A bank decides to have its own and it sets up a subsidiary company that rents cars. Now, the other guys have to charge $45 a day in order to make ends meet, but the banks says it's going to rent cars for $30 a day. Eventually these other guys just can't hack it because they can't afford—

Mr. Normand Bergevin: Under Bill C-8 the banks would not be able to set up a car leasing company.

Mr. Ken Epp: They wouldn't?

Mr. Normand Bergevin: They wouldn't. This bill, as currently drafted, does not allow that.

Mr. Ken Epp: Okay. That's the assurance I'm looking for. Thank you.

(Amendment agreed to)

(Clause 98 as amended agreed to)

The Chair: I'm going to ask permission from Mr. Epp in particular to deal with clauses 99 to 120.

Mr. Ken Epp: Can we approve just up to clause 116?

The Chair: Clause 116? Yes, we can.

(Clauses 99 to 116 inclusive agreed to)

(On clause 117)

The Chair: Now we're on clause 117.

Mr. Ken Epp: Yes. For clause 117 I simply want to request a recorded vote.

The Chair: Okay. We'll have a recorded vote on clause 117.

Mr. Roy Cullen: What's it about?

The Chair: It's about mandatory low-fee bank accounts.

Does everybody have a copy of Bill C-8? You'll find clause 117 on page 74. Would you like to go ahead and read it, or—

Mr. Ken Epp: No, no. I just want a recorded vote.

The Chair: You want a vote par appel nominal, right?

Mr. Ken Epp: I want a recorded vote.

Ms. Pauline Picard (Drummond, BQ): I would like a copy.

• 1625

(Clause 117 agreed to) [See Minutes of Proceedings]

(Clauses 118 to 120 inclusive agreed to)

(On clause 121)

The Chair: Now we have amendment NDP-2. Mr. Nystrom.

Mr. Lorne Nystrom: The amendment here again is very straightforward. In the original draft of the bill last year, referring to the banking ombudsman, the wording said that the minister “will appoint an ombudsman”. Now it says he “shall”. My amendment replaces the “shall” with a “will”, to make certain that an ombudsman is appointed.

The Chair: Mr. Cullen.

Mr. Roy Cullen: Mr. Chairman, I think this was changed because we're trying to create more independent ombudsmen. So the minister may designate an ombudsman, but the wording “shall” means it's then mandatory for the minister. It may well be the board that selects an ombudsman. So this gives the minister more flexibility, and gives the ombudsman more independence. That's why it's done that way.

(Amendment negatived)

(Clause 121 to 126 inclusive agreed to)

(On clause 127)

The Chair: We have three amendments proposed by the government. Just so you're clear on this, amendments G-18, G-25, G-30, G-37 and G-41 are consequential to amendment G-3. A vote on G-3 will apply to amendments G-18, G-25, G-30, G-37 and G-41.

Mr. Roy Cullen: Mr. Chairman, you're correct—government amendment 3 does have consequential impact on some of the other government amendments. Basically, the provision should read “specialized financing entity”, not “specialized financial entity”. This is more of a wording clarification.

(Amendment agreed to) [See Minutes of Proceedings]

The Chair: Now on G-4, a vote on amendments G-19, G-26, G-31, G-33, G-38 and G-42 are consequential to amendment G-4. I'll repeat that for clarification: a vote on G-4 applies to amendments G-19, G-26, G-31, G-33, G-38 and G-42.

Mr. Cullen.

Mr. Roy Cullen: Mr. Chairman, to clarify sections of the act, after reviewing this provision in various contexts, justice department lawyers expressed concerns that there may not be sufficient authority in this provision to allow relief to be provided in respect of all possible cases. The proposed motion clarifies the wording to ensure that sufficient regulatory flexibility will be available. This one deals with the banks.

(Amendment agreed to) [See Minutes of Proceedings]

The Chair: Now on G-5, amendments G-22, G-27, G-32, G-39 and G-43 are consequential to amendment G-5. A vote on G-5 will apply to amendments G-22, G-27, G-32, G-39 and G-43.

Mr. Cullen.

Mr. Roy Cullen: Mr. Chairman, concerns have been raised that the financial institutions may not have fully understood the operation of all provisions of the new permitted investment regime before Bill C-8 was tabled on February 7, 2001. To ensure that any investments inadvertently held by these institutions before the tabling of the new bill are not offside the legislation, the motion changes the transition date from June 25, 1999, to February 7, 2001.

• 1630

(Amendment agreed to) [See Minutes of Proceedings]

(Clause 127 as amended agreed to)

(Clauses 128 to 131 inclusive agreed to)

(On clause 132)

The Chair: On clause 132, we have a number of government amendments, from G-6 through G-15.

Mr. Cullen.

Mr. Roy Cullen: Mr. Chairman, government amendment 6 is a policy clarification. Subsection 508(2) provides that the minister can only designate a bank as a foreign bank if it or a subsidiary enters Canada and establishes a branch, for example, or makes investments in a Canadian entity.

A foreign bank should not be designated as such if a sister company, rather than itself, enters Canada. The bill did not address this situation, so paragraph 508(2)(b) simply clarifies that a real foreign bank could be designated where it and a parent or sister company own shares in the same Canadian entity.

(Amendment agreed to) [See Minutes of Proceedings]


Mr. Yvan Loubier: Could someone explain this amendment more clearly to me.

What changes does this amendment make to the initial bill exactly? It is a major amendment.


The Chair: Who from the officials would like to answer that question? Ms. Ryan.

Ms. Eleanor Ryan (Acting Chief, Structural Issues, Financial Institutions Division, Department of Finance): This is a very much a technical clarification.

In 508(2) we had provided all the circumstances identified for us by the banking community regarding how they could enter Canada. After the bill, they identified to us one other situation: they might hold shares in a common entity with a sister company. They simply pointed that out, and allowed us to make this clarification amendment. So it's just a technical oversight that had not been anticipated.

The Chair: Okay, Mr. Loubier. Does that satisfy you? Okay, great.

(Amendment agreed to) [See Minutes of Proceedings]

The Chair: Now G-7, Mr. Cullen.

Mr. Roy Cullen: Mr. Chairman, this is again a matter of policy clarification. Subsections 507(4) to 507(7) set out deeming provisions that ensure the activities of a sister company are deemed to be the activities of a real foreign bank—thus ensuring that the rules apply to the entire foreign bank conglomerate.

However, in the case of a designation, this deeming is not appropriate. A real foreign bank should not be designated due to the activities of a sister company. Subsection 508(2) ensures that the general deeming provisions do not apply for designation purposes to a real foreign bank.

(Amendment agreed to) [See Minutes of Proceedings]

The Chair: Mr. Cullen, G-8.

Mr. Roy Cullen: Mr. Chairman, G-8 is a French and English concordance. The English text reads “make or cause to be made”. This adds the “cause to be made” to the French version.

(Amendment agreed to) [See Minutes of Proceedings]

The Chair: G-9, Mr. Cullen.

Mr. Roy Cullen: Again, this is French and English concordance. It adds the equivalent wording to “or a substantial investment” to the French version.

(Amendment agreed to) [See Minutes of Proceedings]

The Chair: G-10, Mr. Cullen.

Mr. Roy Cullen: Mr. Chairman, G-10 refers to a reference omitted from the regulations. A Canadian entity is determined to be a limited commercial entity so long as less than 10% of its business is financial in nature. The manner of calculating this 10% threshold will be set out in regulations. The authority to make these regulations was left out, and amendment G-10 provides the authority. Four similar provisions have this same authority.

(Amendment agreed to) [See Minutes of Proceedings]

The Chair: G-11, Mr. Cullen.

Mr. Roy Cullen: Mr. Chairman, G-11 is again a French and English concordance. A phrase in the French version was in the wrong place, thereby changing the meaning.

(Amendment agreed to) [See Minutes of Proceedings]

The Chair: G-12, Mr. Cullen.

Mr. Roy Cullen: Mr. Chairman, this clarifies that the provision applies to a foreign bank with a financial establishment in Canada.

(Amendment agreed to) [See Minutes of Proceedings]

The Chair: G-13, Mr. Cullen.

Mr. Roy Cullen: Mr. Chairman, this provision is for clarification. After reviewing it in various contexts, justice department lawyers expressed concern that this provision may not have sufficient authority to allow relief to be provided in respect of all possible cases. The proposed motion clarifies the wording to ensure that sufficient regulatory flexibility will be available. This applies to the foreign banks.

• 1635

(Amendment agreed to) [See Minutes of Proceedings]

The Chair: Mr. Cullen, amendment G-14.

Mr. Roy Cullen: Mr. Chairman, this amendment is French and English concordance. The French version omitted reference to “a Canadian entity”.

(Amendment agreed to) [See Minutes of Proceedings]

The Chair: Mr. Cullen, amendment G-15.

Mr. Roy Cullen: Again, Mr. Chairman, it's a French-English concordance. The French version omitted reference to the words “in Canada”.

(Amendment agreed to) [See Minutes of Proceedings]

(Clause 132 as amended agreed to)

The Chair: Could I have permission from the committee to deal with clauses 133 to 182? Mr. Epp, is that okay with you?

Mr. Ken Epp: Yes.

(Clauses 133 to 182 inclusive agreed to)

(On clause 183)

The Chair: We do have amendment G-16. Just before you go ahead, Mr. Cullen, I'd like to bring to the attention of the committee that a vote on G-16 will apply to amendments G-28, G-36 and G-44.

Mr. Cullen.

Mr. Roy Cullen: Mr. Chairman, this deals with an omitted reference. Bill C-8 only provides the commissioner with the ability to collect information for the purposes of the Bank Act. The amendment extends to information for the purposes of the Financial Consumer Agency of Canada Act. That's why this amendment is here. And as you say, three other motions are affected.

(Amendment agreed to) [See Minutes of Proceedings]

The Chair: Now we have an amendment from the Bloc. Mr. Loubier.


Mr. Yvan Loubier: My amendment is geared to ensuring that medium-range and large banks are placed on an equal footing. I explained the justification for this amendment earlier.


The Chair: Before we take a vote on this, I would note that a vote on BQ-30 will apply to amendments BQ-31 to BQ-60.

(Amendment negatived) [See Minutes of Proceedings]

The Chair: Now we move to amendment G-17.

Mr. Roy Cullen: Mr. Chairman, this is to deal with an omitted cross-reference. This amendment is to the bank holding company, and is a counterpart to amendment number 10. It adds a reference to section 879.1.

(Amendment agreed to) [See Minutes of Proceedings]

The Chair: Amendments G-18, G-19 and G-20 and consequential, just in case some people are wondering why we're not dealing with them.

(Clause 183 as amended agreed to)

(Clauses 184 to 218 inclusive agreed to)

(On clause 219)

The Chair: We are now going to clause 219. We have amendment G-21. Mr. Cullen.

Mr. Roy Cullen: Yes, Mr. Chairman. This is for clarification. The Canadian Payments Association rules provide a technical and operational framework for Canada's payment clearing and settlement system. They only apply to its private members. They were never intended to be treated as statutory instruments or regulations, as they require only CPA board approval. This motion clarifies the legal status of CPA rules.

(Amendment agreed to) [See Minutes of Proceedings]

(Clause 219 as amended agreed to)

The Chair: I once again request the permission of the committee to deal with clauses 220 to 233.

Mr. Richard Harris: Mr. Chairman, we would like a recorded vote on clauses 234 and 235.

The Chair: Okay. Shall clauses 220 to 233 carry?

(Clauses 220 to 233 inclusive agreed to)

• 1640

The Chair: Now we'll deal with clauses 234 and 235 and you want a recorded vote. We'll deal with clause 234 first. Mr. Harris would like a recorded vote. Would you like to explain the reason?

Mr. Richard Harris: We feel that this clause and 235, which we'll deal with in a second, impose some rather onerous restrictions on the CPA's ability to make decisions, and come with a very intensive reporting obligation. We think it's simply another intrusion into the freedom of the CPA—who, incidentally, have an impeccable track record to date—to conduct their business. We think these are unnecessary clauses, so we will oppose them.

(Clause 234 agreed to: yeas 8; nays 6)

(On clause 235)

The Chair: Mr. Harris, I understand you would like to deal with clause 235 as well.

Mr. Richard Harris: Yes, please.

The Chair: Would you like to explain the importance of this clause?

Mr. Richard Harris: It's for the same reasons, basically.

The Chair: The same reasons cited earlier.

(Clause 235 agreed to: yeas 8; nays 6)

Mr. Roy Cullen: I have a point of order.

The Chair: Yes, sir.

Mr. Roy Cullen: The clerk needs to count Ms. Scherrer for our recorded division.

Ms. Hélène Scherrer (Louis-Hébert, Lib.): I'm in favour for both.

Mr. Ken Epp: Is she signed in?

The Chair: It's eight to six.

Mr. Ken Epp: She said no both times.

Mr. Richard Harris: Could we poll the Liberal members and ask them if they know what they voted for, or are they just following the script here?

(Clauses 236 to 243 inclusive agreed to)

(On clause 244)

The Chair: Now we'll deal with clause 244, and we do have an amendment from the government, G-22.

Mr. Roy Cullen: Yes, Mr. Chairman, this is for French-English concordance. It includes a reference to participants that was omitted in the English version of the bill.

(Amendment agreed to) [See Minutes of Proceedings]

(Clause 244 as amended agreed to)

(Clauses 225 to 247 inclusive agreed to)

The Chair: G-23 is actually a new clause, 247.1, I believe.

Mr. Roy Cullen: Yes, Mr. Chairman. This is a consequential amendment as a result of our amendment G-21 on the transitional provision.

Mr. Chairman, the provision is intended to ensure that the amendment applies to all previously issued CPA rules.

• 1645

The Chair: Yes, Mr. Epp.

Mr. Ken Epp: I had my hand up before—I guess you didn't remember. I have a question with respect to this.

How far back does this go? It says that the rules were deemed to have come into force on the day the rule was made. We should assume that CPA isn't going to rewrite all its rules and say these are all in effect the day the bill is proclaimed.

The Chair: Would you like to address that?

Mr. Denis Normand: It just says any rule that exists as of enactment is still valid, and has always been considered to be valid.

Mr. Ken Epp: This is then a rather serious omission in the bill, not having this clause. It would have thrown them into total disarray—is that the reason for this?

Mr. Denis Normand (Senior Chief, Payments, Financial Sector Division, Department of Finance): It's a technical issue of clarification. There is an argument that because CPA can levy penalties and sanctions on members for not following their bylaws and rules, they could potentially be regulations.

As government motion 21 indicated there was never any intention in the original legislation, dating back to 1980, for this to occur, we thought we'd propose the amendment to clarify. In essence, then, this motion simply says it was never intended to be that way.

Mr. Ken Epp: I have another question.

The Chair: Yes, Mr. Epp.

Mr. Ken Epp: I should have asked this earlier in our hearings, but I didn't, so I'd like the answer now. The minister, under Bill C-8, has the right to disallow rules that the CPA puts forward. Did the minister have that right also before Bill C-8? In other words, does he have that now?

Mr. Denis Normand: The current legislation requires that CPA bylaws receive Governor in Council approval, and that has been the case since the act was passed in 1980. This issue of rules is new and came out of a number of problems in the CPA rules that had policy implications and competitiveness relevance.

Mr. Ken Epp: My understanding is that now the minister has the right only to rescind rules when he becomes aware of them, but the rules come into force the day they're proclaimed, or the day that CPA announces them, and they no longer require Governor in Council approval. Is that correct?

Mr. Denis Normand: What the legislation does, with the motions we have here, is simply clarify that rules are not regulations and have never been regulations, so that all the outstanding rules that CPA has—and there are volumes of them—are not regulations.

Mr. Ken Epp: Okay. But you said before that these rules all require Governor in Council approval.

Mr. Denis Normand: No. I said the bylaws—

Mr. Ken Epp: The bylaws do.

Mr. Denis Normand: Yes, that's correct.

Mr. Ken Epp: Okay. It's still the same, then, basically?

Mr. Denis Normand: There is no change to the provisions of the act that require Governor in Council approval for the bylaws.

Mr. Ken Epp: Okay.

Mr. Denis Normand: The only thing going forward is that the rules will potentially be subject to disallowance.

Mr. Ken Epp: Yes, okay.

The Chair: Thank you, Mr. Normand.

(Amendment agreed to) [See Minutes of Proceedings]

(Clauses 248 to 313 inclusive agreed to)

(On clause 314)

The Chair: I believe there is an amendment by the government, G-24.

Mr. Roy Cullen: Mr. Chairman, this is for clarification. It adds the word “either” to clarify the provision as referring to either the activities of an association, or a retail association.

(Amendment agreed to) [See Minutes of Proceedings]

(Clause 314 as amended agreed to)

• 1650

(Clauses 315 to 335 inclusive agreed to)

(On clause 336)

The Chair: Amendment G-28 is consequential to G-16.

(Amendment agreed to) [See Minutes of Proceedings]

(Clause 336 as amended agreed to)

(Clauses 337 to 355 inclusive agreed to)

(On clause 356)

The Chair: We have amendment G-29. Mr. Cullen.

Mr. Roy Cullen: Mr. Chairman, this is for French-English concordance. It corrects the English version by removing redundant wording at the end of the paragraph.

(Amendment agreed to) [See Minutes of Proceedings]

(Clause 356 as amended agreed to)

The Chair: Shall clauses 357 to 400 carry?

Mr. Lorne Nystrom: No.

The Chair: Mr. Nystrom, which clause interests you?

Mr. Lorne Nystrom: Clause 390. I want to suggest an amendment, if I could, Mr. Chair.

You recall the Credit Union Central came before the committee about a week or so ago. Bill Knight was here with officials from Toronto Credit Union Central. There is a technical amendment they'd like to have. I wonder if the government has had a chance to look at this.

The Chair: Before you place your amendment, can we kindly vote on clauses 357 to 389?

(Clauses 357 to 389 inclusive agreed to)

(On clause 390)

The Chair: Okay, now we'll deal with clause 390. Mr. Nystrom.

Mr. Lorne Nystrom: The technical amendment that the Credit Union Central wanted—I think everybody has a copy of its brief, at least those who are active on the finance committee and were here when Mr. Knight made his presentation—would be that clause 390 be changed by adding a subsection (3) reading as follows:

    The entity is an association, and the investment is not restricted by the regulations under paragraph 396(d).

You will recall that when Mr. Knight was here, he talked about how the legislation as written would discriminate against the democratic culture, the historical culture of the credit union movement. He said this was not an intentional obstacle for the credit unions, but more of a technical glitch, from his understanding in talking with the officials of the Department of Finance.

What this does is take into account the special needs of credit unions across the country. The bill, as currently drafted, does not allow a federal association to have a substantial investment in another federal association without control, and that is really inconsistent with the structure of credit unions. What the credit unions want is the right to have a national banking association across the country without Vancouver Credit Union Central, for example, having control of that new entity or Vancouver Credit Union Central, along with the Ontario Credit Union Central, having control of that entity.

Mr. Knight explained the thing to us at great length, and it doesn't appear in the list of government amendments. I'd like to ask why it is not there, and since it is not there, I want to propose it, to test the committee as to whether we should proceed in this direction.

The only other recourse, if we don't do it, is to have Mr. Knight probably go to the Senate finance committee and try to bring it in that way. But I prefer, since we are the elected institution, to do it here, rather than do it through the Senate and have it come back to the House of Commons in that way.

The Chair: Mr. Cullen.

Mr. Roy Cullen: Mr. Chairman, what is proposed as a technical fix is much more than a technical fix. A technical fix we proposed in paragraph 396(a), our government amendment G-26. So that was a technical glitch, which has been fixed.

What they are referring to is an idea of broadening the flexibility for the credit union movement above and beyond what is available in the act to banks and other financial institutions. The strong feeling of the government at this time is that while we're prepared to work very closely with the credit union movement, particularly with respect to the proposed merger discussions between the Ontario Central and the B.C. Central, we are very confident we can reach a regulatory solution to allow that.

• 1655

The concern is that we'd rather deal with each exception on a case-by-case basis, for prudential reasons largely. If we have to go chasing all the exceptions, we'd rather deal with exceptions to the broad rule, which is that the control requirement is the requirement of all other financial institutions. If we relax it, we will be chasing these shadows, and we'd rather deal with exceptions on a case-by-case basis.

I can tell you, Mr. Nystrom, that on this side of the table—and I know it was the same for many of you on that side of the table—we were anxious to see the credit union movement come forward, be an active player, and provide consumers with more choice. You have the undertaking of the Secretary of State to work with their proposal. On this particular issue, I know the department is working very closely with them to find a regulatory solution, and then it would be the strong desire of the government at this point in time.

Mr. Lorne Nystrom: I wonder if I could ask the officials, Mr. Chair, whether or not they see any regulatory solution, or whether or not this is better dealt with in the bill itself.

The Chair: Mr. Salembier.

Mr. Gerry Salembier: We do see a regulatory solution. The bill does in fact provide regulation-making authority to permit exactly the kind of structure that Mr. Knight has described, both before this committee and to us, and that is where an association would be permitted to own an interest in another association without being required to control it. However, that would be provided by way of regulation rather than being written into the statute.

The statute contains the general prohibition on these kinds of situations existing, which we believe is consistent with the prudential soundness of these kinds of arrangements. However, in a specific case, there is the ability in the statute to make regulations that will allow a particular instance—such as what is envisaged in the merger of the two centrals in B.C. and Ontario—to go forward.

The Chair: Mr. Harb.

Mr. Mac Harb (Ottawa Centre, Lib.): Mr. Chair, it's very interesting to hear the comments of the officials. I think this issue can be resolved if it's to go on the record in the House of Commons at third reading, or at the report stage when we go back. At least some of us who are very much interested in these issues, like my colleague Mr. Nystrom, can go back to our constituents and let them know there is in fact going to be a solution to it through the regulatory process.

The Chair: Thank you.

We still have the amendment here. Would you like us to deal with this, Mr. Nystrom?

Mr. Lorne Nystrom: Yes.

The Chair: We'll put that as NDP-3. Tell me if I'm reading it correctly here. It moves that proposed subsection 390(4) be amended to add the following paragraph—

Mr. Lorne Nystrom: Yes, and it's subparagraph (iii).

The Chair: Go ahead. You had better read your own, I guess.

Mr. Lorne Nystrom: The entity is an association, and the investment is not restricted by the regulations under paragraph 396(d).

The Chair: Thank you.

Okay, does the amendment carry?

Mr. Lorne Nystrom: I'd like to have a recorded vote on this one, if I could, Mr. Chair.

(Amendment negatived: nays 8; yeas 6) [See Minutes of Proceedings]

(Clauses 390 to 400 inclusive agreed to)

(On clause 401)

The Chair: I now have Bloc amendment BQ-61, but before you speak on this issue, amendment BQ-62 is consequential to amendment BQ-61, so the vote on BQ-61 will apply to amendment BQ-62.

Monsieur Loubier.


Mr. Yvan Loubier: Mr. Chairman, this amendment is largely based on the same reasons I laid out earlier. In addition, I would like to advise you that at the report stage, we will be tabling further amendments stemming from our concerns with regard to medium-range banks and financial institutions.

• 1700

We hope that the government will be more open to our suggestions and that the arguments it lays out, whether they be in favour or not of our proposals, will at least be good ones.


The Chair: Mr. Cullen, do you want to speak to that?

Mr. Roy Cullen: Mr. Chairman, I think this is along the same lines we discussed before. As I understand it, this particular amendment would result in Sun Life and Manulife becoming eligible to be closely held on January 1, 2002.

(Amendment negatived) [See Minutes of Proceedings]

(Clauses 401 to 425 inclusive agreed to)

(Clause 426 as amended agreed to)

(Clauses 427 to 436 inclusive agreed to)

(Clause 437 as amended agreed to)

(Clauses 438 to 445 inclusive agreed to)

(On clause 446)

The Chair: We have amendment G-34. Before you speak to that, a vote on G-34 will apply to amendment G-35, since amendment G-35 is consequential to amendment G-34.

Mr. Cullen.

Mr. Roy Cullen: Thank you, Mr. Chairman.

This corrects some omitted wording. Bill C-38 originally contained a reference to liquidity that was mistakenly omitted in Bill C-8. The amendment returns the original wording.

(Amendment agreed to) [See Minutes of Proceedings]

(Clause 446 as amended agreed to)

(Clause 447 as amended agreed to)

(Clauses 448 to 464 inclusive agreed to)

(Clause 465 as amended agreed to)

(Clauses 466 to 549 inclusive agreed to)

(On clause 550)

The Chair: For clause 550, we have amendment G-40.

Go ahead.

Mr. Roy Cullen: Mr. Chairman, thank you.

This is for French-English concordance. The English version correctly refers to section 417. This corrects the French version, which mistakenly refers to section 415.

(Amendment agreed to)

(Clause 550 as amended agreed to)

(Clauses 551 to 565 inclusive agreed to)

(Clause 566 as amended agreed to)

(Clauses 567 to 573 inclusive agreed to)

(On clause 574)

The Chair: We have amendment G-45 for clause 574.

Go ahead.

Mr. Roy Cullen: Mr. Chairman, this again is for French-English concordance. The French version refers to the Winding-up and Restructuring Act generally. The English version refers specifically to paragraph 11(d). The amendment removes the specific reference in the English.

(Amendment agreed to) [See Minutes of Proceedings]

(Clause 574 as amended agreed to)

(Clauses 575 and 576 agreed to)

(On clause 577)

The Chair: Mr. Cullen, do you have anything on amendment G-46, clause 577?

Mr. Roy Cullen: Mr. Chairman, again it's French-English concordance. The French version refers to the Winding-up and Restructuring Act generally, while the English provision refers specifically to paragraph 11(d). This amendment removes the specific reference in the English.

(Amendment agreed to) [See Minutes of Proceedings]

(Clause 577 as amended agreed to)

The Chair: Mr. Epp, do I have permission to go from clause 578 to clause 594?

Mr. Ken Epp: With my blessing.

The Chair: Okay.

What about the rest of the committee?

Some hon. members: Agreed.

(Clauses 578 to 594 inclusive agreed to)

(Schedules 1 to 3 inclusive agreed to)

(Clause 1 agreed to)

The Chair: Shall the title carry?

Some hon. members: Agreed.

The Chair: Shall the bill carry?

Some hon. members: Agreed.

The Chair: Shall I report the bill to the House?

An hon. member: On division.

The Chair: On division.

Shall I report the bill to the House with amendments?

Some hon. members: Agreed.

The Chair: Shall the committee order reprints for use for report stage?

Some hon. members: No.

• 1705

The Chair: Thank you very much.

We won't be having breakfast together. I'm sorry about that.

Before you leave, I'd like to express my gratitude to everyone who was involved in this bill, first of all. This was a lot of work. I believe it was four years in the making. To the researchers, to the clerks, to the officials, and to everyone involved, thank you so much.

An hon. member: Hear, hear.

The Chair: I know you've worked a great deal between Bill C-38 and Bill C-8, and you can rest assured that members of this committee truly appreciate that. So thanks again.

Some hon. members: Hear, hear.

The Chair: I don't know where everybody's going. This is not over yet.

We have a motion here that the committee host a breakfast on the morning of Wednesday, March 28, 2001, during which it will meet with some members of the Committee on Economic and Monetary Affairs of the European Parliament.

An hon. member: So moved.

(Motion agreed to)

The Chair: We have the first report of the subcommittee on agenda and procedure. I already went through this, but I'm going to go through it again so that we can get a vote on it. I'll read it:

    The Sub-Committee proceeded to consider the future business of the Committee and agreed to make the following report:

    That, in relation to Bill C-8, the Committee proceed to clause-by-clause consideration....

We've done that already.

    That, in relation to Bill C-13, the Committee proceed to hear officials as soon as possible once the legislation has been referred to the Committee and that it hear witnesses on the bill during the week of March 26.

    That the Committee hold a Cost Recovery follow-up roundtable.

    That the Finance Committee invite those FTAA (Free Trade Area for the Americas) negotiators responsible for matters directly or indirectly touching the financial sector or any other sector relating to the economy or finance; and that they be invited to appear before the Committee on a date prior to April 6, 2001, the last sitting day before the starting date for the Summit of the Americas.

    That the Committee hold a roundtable session on the Green Economy.

    That the researchers be instructed to prepare outlines of various study topics to be circulated to members for their consideration as possible future business of the Committee.

An hon. member: So moved.

(Motion agreed to)

The Chair: Thank you very much. The meeting is adjourned.

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