44th Parl. 1st Sess.
June 18, 2024 10:00AM
- Jun/18/24 3:00:04 p.m.
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Mr. Speaker, I thank my colleague for giving me the chance to remind the entire House that all federal institutions, including Crown corporations like Canada Post, are subject to the Canadian government's Official Languages Act. The good news is that this act was strengthened in the past few years. For the first time in this country's history, this act and the Canadian government recognize that we must defend the French language throughout Canada, but especially in Quebec.
This is everyone's responsibility. It is the responsibility of the Canadian government. What is more, we have a multi-billion dollar plan to help communities across the country.
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- Jun/18/24 3:00:46 p.m.
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Mr. Speaker, by hiring unilingual anglophone employees, Canada Post is undermining the right of all its employees in Quebec to work in French. This issue is putting the reformed Official Languages Act to the test.
Let us not forget that Quebec and the Liberals reached a compromise that does not require federal corporations to comply with the Charter of the French Language. Canada Post is using that compromise to anglicize its workplaces.
Does the minister realize that this is further proof that, reform notwithstanding, the Official Languages Act still promotes the anglicization of Quebec?
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- Jun/18/24 3:01:29 p.m.
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Mr. Speaker, on the contrary, for the first time in this country's history, the new Official Languages Act recognizes that French is in jeopardy in Quebec and that it must be protected across the country, but especially in Quebec. I have already answered that question. I made it clear that all Crown corporations are subject to the same treatment.
I have a few seconds left, so, on behalf of all members, I want to thank the latest cohort of pages, who will soon be leaving us, for their outstanding service over the past year.
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- Jun/18/24 3:05:03 p.m.
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Mr. Speaker, the Minister of Environment, with the support of the Bloc Québécois, is preparing to force more radical policies on Quebeckers by imposing a decree that will destroy the forestry industry in Saguenay—Lac‑Saint‑Jean.
TVA Nouvelles reports that the Bloc environment critic also believes that it is fine for Ottawa to get involved in the caribou issue. The Conservative Party is the only one defending Quebec's forestry workers.
Can the Minister of Environment let Quebec manage its territory the way it sees fit?
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- Jun/18/24 3:08:00 p.m.
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Mr. Speaker, not only is the Conservative leader against the Canadian dental care plan, but he also misled seniors in Quebec City by saying on the radio just a few days ago that the Canadian dental care plan does not exist and that people should not try to register for it. That shows contempt for seniors in Quebec.
The good news is that it is not working, because over one-third of the two million seniors who have already registered are in Quebec. Another piece of good news is that, next week, as of June 27, all children between the ages of zero and 18 and people with disabilities will also be able to sign up for the new Canadian dental care plan.
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- Jun/18/24 4:40:30 p.m.
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Madam Speaker, that was another example of our colleague's eloquence. Unfortunately, it is also another example of the alternating glorification and demonization, depending on which party you belong to.
I would like to remind the House that any money transferred by the federal government does not just appear out of thin air or grow on trees. It comes from taxes paid to Ottawa by Quebec and Canadian taxpayers. It is also the debt that Quebec and Canadian taxpayers will have to pay.
I would still like to understand the logic. When a place like Quebec already has all the health, dental and pharmacare infrastructure in place, why is it absolutely necessary to create a second structure that will cost even more, simply because the federal government has decided to meddle in what Quebec is already doing very well?
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- Jun/18/24 4:41:36 p.m.
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Madam Speaker, I am afraid you will not give me the amount of time I would require in order to give a detailed answer to my friend, but let me make the suggestion to her that all she needs to take a look at is the number of people in the province of Quebec who are actually registered for the dental program, and she will find that there is in fact a need for the program.
I will go further by saying that there is a need in virtually all the different regions of the country. We see that by the number of people who are actually registering, and we have not even completed the full rollout where we will see more and more individuals ultimately being able to register.
It is important we recognize that Canada is a vast country with many different regions. There are some things in which there is a need for the federal government, in working with different jurisdictions, to try to provide the programs that provide some equity and a sense of fairness so that, if someone happens to live in Vancouver, in Halifax or anywhere in between, they can get, for example, their diabetes medication.
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- Jun/18/24 4:47:06 p.m.
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Madam Speaker, I want to pick up on the answer my colleague gave a few minutes ago. Some Canadian provinces have little or no pharmacare coverage and do not have the infrastructure in place for the dental care program. Quebec has both, and there is a concept called the right to opt out with compensation.
Why does the federal government refuse to give Quebec the right to opt out with compensation? This would avoid creating a second structure for Quebeckers while allowing the rest of Canada to have its own structures.
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- Jun/18/24 4:47:52 p.m.
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Madam Speaker, let me give a specific example. Provinces come up with great ideas at times, and often the national government will take a look at them to see how we might expand on them. A good example is our health care system. Saskatchewan came up with a good idea, and ultimately it was spread across Canada. Quebec had an excellent idea in regard to $10-a-day child care. We took that idea and expanded it across the nation. It increases a sense of fairness and equity for all Canadians.
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Madam Speaker, the budget implementation measures in Bill C-69 are full of interference in the jurisdictions of Quebec and the provinces. Whether it is a question of housing, health, education or the banking sector, the fiscal imbalance really is on full display.
I would like to know what my colleague thinks.
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- Jun/18/24 5:17:35 p.m.
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Madam Speaker, in his speech, my colleague talked about the cost of living and touched on the issue of housing. At the moment, there is a trend on both the Liberal and Conservative sides. There is a coalition trying to interfere in Quebec's areas of jurisdiction when it comes to housing.
Both the Leader of the Opposition's bill and the latest budget from the party opposite attempt to get tough with cities so they will propose housing solutions. These magic wands will not work. Instead, the money earmarked for housing could be transferred unconditionally to Quebec, because housing comes under Quebec's jurisdiction. What does my colleague think?
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Madam Speaker, Bill C‑69 is a budget implementation omnibus bill that creates or amends 67 different acts. The government promised never to use this type of thing, but for the past several years, it has continued to do so.
Bill C‑69 enacts, among other things, the consumer-driven banking act, which establishes that it is the federal government alone that regulates this sector and that the Financial Consumer Agency of Canada acts as the regulator.
We asked the government to take this division out of Bill C‑69 and correct some of its shortcomings over the summer so it could come back this fall with a framework that does not give Bay Street an unfair advantage over other financial institutions, that respects the jurisdictions of Quebec and the provinces, and that will be administered by a competent body. However, the government just voted against our request. The government is not working well. It is not listening, it is being partisan, and it is undermining Quebec. That is why we will be voting against this bill.
I am going to talk more about the open banking system, beginning with some context. As things stand, all financial services are based out of financial institutions that people do business with directly. These institutions are legally and financially responsible in the event of fraud or data theft, so they are fiercely protective of our personal data. Under an open banking system, financial institutions will have to share our data with platforms that will enable us to access all our accounts with one click. It would be a minor revolution. Ultimately, we can envision a system in which financial institutions essentially just create financial products, with client relations being handled by tech companies that do not themselves provide financial products, but act as intermediaries and data aggregators. That calls for a framework.
People want the flexibility an open banking system offers. That is why financial technology or fintech companies have already started coming on line despite the legal limbo. They are not well regulated, so they find other ways to evolve. Users themselves provide their credentials. The app goes into a user's account, extracts data from the screen and stores it. Financial institutions' secure networks get regular visits from actors outside the financial sector, and that makes them vulnerable. The more advanced these strategies get, the greater the risk.
We know that the level of risk varies. An aggregator that scans public data to show us mortgage rates at all financial institutions in one click is low risk. When it collects our personal data to give us a detailed picture of our financial situation, that carries more risk for the protection of sensitive personal information, namely financial information. If the app can be used to perform transactions, which implies that it places orders, that opens up a whole new level of risk, the risk of fraud. Let us also not forget that a series of orders quickly placed with the help of an AI system could completely destabilize all financial institutions. What about the principle of needing to know the customer? That principle is the foundation of our anti-money laundering laws. How can a financial institution apply this principle when it is communicating via an app?
Lastly, an important part of risk is the financial capacity to take on risk. Without that, the consumer could lose everything. Prudential regulations have to adapt. What we need is a clear framework with clear obligations and responsibilities.
The financial sector is a shared jurisdiction. The federal government has authority over banks and federally incorporated financial institutions. Financial institutions that are not banks, namely credit unions and trust companies, fall under the jurisdiction of Quebec and the provinces. Financial intermediaries, such as investment dealers and financial advisers, fall under the jurisdiction of Quebec and the provinces. Tech companies in the financial sector are not currently regulated, but they are likely similar to financial intermediaries.
There are different models in all this. There is the Interac approach. The Interac system, which enables exchanges between institutions and allows us, for example, to use our debit card everywhere, was developed by the financial companies themselves. These companies agreed on a common technology and standards to ensure that transactions are secure. Companies that adopt and comply with the common standards can join the system and offer Interac. This is the approach taken by the United Kingdom. In Canada, it is the approach that was favoured by the Advisory Committee on Open Banking in 2021.
The advantage of this approach, which is the simplest and most flexible, is that each government retains full regulatory power and adopting the open banking system does not result in any transfer of power. The disadvantage is that it is a form of self-regulation. The standard adopted may very well be aimed primarily at developing the sector rather than protecting citizens. Personal information, financial risks and fees come to mind. The banks, which initially advocated self-regulation, realized that squeezing out the legislator would not work and that co-operation would be a more realistic option.
Another approach, the one that we advocate and prefer, is the securities approach. Securities fall mainly under provincial jurisdiction, but Ottawa has laws governing federally incorporated companies. The Supreme Court of Canada has also recognized federal jurisdiction over systemic risk in the financial sector. In Quebec, the Autorité des marchés financiers is the regulator. To ensure that businesses could raise capital across Canada and that registrations in one province would be recognized everywhere, governments decided to coordinate. That is why Quebec's corporations legislation is very similar to the federal corporations legislation and to the corporation laws of all the other provinces. The same is true for all legislation governing the various aspects of securities. Quebec retains its legislative powers. The Quebec act may be stricter in some respects. For example, Quebec is the only province that requires a French version for all corporations registered with the Autorité des marchés financiers. However, this version must comply with the common standard adopted by all governments.
For years now, the federal government has wanted to centralize securities regulation in a single commission and concentrate the entire financial sector in Toronto, to the detriment of Montreal in particular. Quebec and the Quebec business community have always opposed this. In 2021, my party successfully amended the budget implementation bill to close the federal office responsible for creating a single securities commission. It was a really nice moment in a committee meeting over Zoom. I remember it clearly. The model of co-operation between governments, which has survived repeated attacks by the federal government, is still going and is working well. As I was saying, the securities model is the approach that my party and I favour for the open banking system.
However, in Bill C‑69, Ottawa is opting for unilateralism and centralization. As I was saying earlier, Bill C‑69 enacts the consumer-driven banking act, which would make the federal government the sole regulator of this sector, with the Financial Consumer Agency of Canada serving as the regulator. That is a problem, too. The agency does not have the qualifications to do that at all. Since fintechs are not under federal jurisdiction, Ottawa has opted to regulate them indirectly by regulating how banks can transact with them.
Specifically, Bill C‑69 provides that banks and other federally regulated financial institutions will be covered by the new act. They will be required to co-operate with fintech companies, but they may do so only in accordance with federal rules and standards. Institutions that are not federally regulated will be ignored. They can opt in voluntarily with approval from their province, which would then have to waive the right to apply its own laws to the portion of their activities that comes under the open banking system. For now, Bill C‑69 does not affect insurers, because of the sensitive nature of the medical data they hold, or intermediaries such as brokers, but the framework will likely expand to cover them in the future.
The specific rules and standards that will apply to the sector, particularly in terms of consumer protection and financial liability, will be set out in another bill that is due out in the fall, but the decision to make it exclusively federal is being made now, in Bill C‑69.
In practical terms, the Quebec Consumer Protection Act and the Quebec act respecting the protection of personal information could cease to apply to financial institutions for any activities related to open financial services. That is no small thing.
We are getting ready to pass this bill at third reading in the House, but the impact of an exclusively federal open banking system on the prudential obligations of Quebec financial institutions, as set out by the Autorité des marchés financiers, is still unclear.
In addition to forcing Quebec to transfer legislative power to Ottawa, Bill C-69 puts Quebec's institutions at a disadvantage with respect to federal institutions. While banks will have only one set of regulations to follow, under this bill, an institution like Desjardins would be caught between two governments: the Government of Quebec, for its general operations, and the federal government, for its technological interactions with customers. That is ridiculous.
The fact that Quebec institutions will be subject to two uncoordinated regulatory bodies could be downright dysfunctional and give banks an egregious advantage over co-ops and trust companies. That is unacceptable.
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Madam Speaker, after that 15-minute break to discuss Bill S-224, I am going to return to my speech on Bill C-69. I want to focus on the division that creates the federal framework for the open banking system and centralizes powers.
As I said before the break, under this bill, banks under federal jurisdiction would have only one set of regulations to follow, whereas an institution under provincial jurisdiction, like Desjardins, would be caught between two governments: the Government of Quebec, for its general operations, and the federal government, for its technological interactions with customers. The fact that these institutions will be subject to two uncoordinated regulatory bodies could be downright dysfunctional and give banks an egregious advantage over co-ops, trust companies, credit unions, Alberta Treasury Branch Financial, and so on. Why always favour Bay Street? This is unacceptable.
Bill C‑69 places Quebec in a dilemma in which there are no good options. If we refuse to join the federal framework, our institutions will stay trapped in the 20th century while their federal competitors step into the technological 21st century. Maybe we could let our financial institutions opt in to the federal framework, but then Quebec would have to waive the right to apply its own laws to their activities that come under the open banking system, which is unacceptable, especially with the Civil Code, consumer protection laws and so forth.
Then there is the worst-case scenario. In order to survive against its federal competitors, an institution like Desjardins could choose to stop being a Quebec institution within the meaning of Quebec's Cooperatives Act and become a federal institution under Canadian co-operative bank legislation. Trust companies would face the same choice. Since the open banking system could eventually be expanded to cover insurance, all of our insurance companies could switch over to federal regulation. That is what is at issue in Bill C‑69.
If this worst-case scenario comes to pass, the entire financial sector and all of its activities will be completely outside Quebec's jurisdiction. That is a serious threat to Montreal's status as a financial hub. In short, by using its power over banks to regulate all companies that interact with them, Ottawa is trying to force Quebec and the provinces out of the financial sector, which it failed to do when it was trying to regulate securities.
Rather than taking the unilateral, centralist route, Ottawa should have chosen co-operation. It could have called a federal-provincial finance ministers' working meeting on open banking. It could have encouraged them to release a joint statement at the end of this meeting in which the governments announce their intention of developing a common regulatory approach with a clear deadline, such as 2025, and possibly setting up a federal-provincial office. It could have sent a clear message to all financial institutions, not just banks, telling them to agree on a common technology, such as a secure data transfer protocol, because open banking is coming. It could have worked on common regulations on accreditation rules for fintech companies, security standards, clarification of financial liability, and consumer and data protection.
We asked the government to take out the division on open banking that centralizes the sector exclusively at the federal level, to take a few months to coordinate with the various players and the provinces and then to come back in the fall with a framework that respects jurisdictions and does not put provincially regulated institutions at a disadvantage. This government rejected our proposal, so now we are going to have to build this new system on a very bad foundation.
Another concern is that, in Bill C‑69, the government delegates the administration of the framework to the Financial Consumer Agency of Canada, an agency that mainly promotes financial literacy and does not have any of the required expertise. In committee, FCAC representatives acknowledged that they did not have expertise in sharing financial data in a way that minimizes the obvious cybersecurity risks. They also told us they do not currently have a plan for developing the expertise needed to oversee the security aspect of open banking.
We also asked several questions that the FCAC representatives said they were unable to answer. For example, since fintech companies are not banks, they are not federally regulated.
Did the government obtain the consent of the provinces, particularly Quebec, which has its own civil laws, before introducing this bill? They are unable to answer.
During the briefing on the notice of ways and means preceding the bill, it was my understanding that provincially regulated financial institutions could opt in to the federal framework provided that the province consents and declines to regulate those activities involving the open banking system. Is that the case? They do not know. They are unable to answer.
Which provincial laws will have to take a back seat to federal laws? They cannot answer this, either.
Who will be tasked with certifying the technology companies? Will it be Ottawa or the Autorité des marchés financiers? They are unable to answer.
Will Quebec's Consumer Protection Act apply to the activities of the open banking system? They are unable to answer. In the event of fraud or damages, will it be possible to launch a lawsuit or class action under the Civil Code or the Consumer Protection Act against a fintech company? Once again, they are unable to answer that question.
Will the sharing of financial liability between the financial institution and the technology company necessitate changes to the financial institutions' prudential standards? Will the Autorité des marchés financiers need to change its rules to comply with the federal framework? Again, they are unable to answer.
None of this is surprising. The Financial Consumer Agency of Canada is not well placed to administer this framework. It learned it would be receiving this role the day before the budget was tabled. When it comes to behaving like amateurs and making things up on the fly, this government takes the cake.
To avoid a disaster or some risky backpedalling, we asked the government to remove this division from Bill C-69. We suggested reworking it this summer and coming back with a good bill this fall. The government refused.
We are opposing this bad bill that sets this entire sector up on a terrible foundation. It is unacceptable.
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- Jun/18/24 5:54:06 p.m.
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Madam Speaker, that is a big problem for us with this bill.
The bill is 660 pages long and amends or creates 67 laws. Some of it is good, and some is not so good.
One example of something good is that it changes the rules so that companies that declare their profits in tax havens are taxed more effectively. That is a step forward. That is good. We applaud that.
The $11 billion being given to the gas industry to make hydrogen is a subsidy, a program tailor-made for the gas industry. It is not a plan to fight climate change. Therefore, we oppose it.
I spent all my allotted time talking about open banking for a reason. It is a big deal. It is a big deal for Quebec, for Montreal's status as a financial hub, and for our financial institutions, like Desjardins. It is unacceptable. Once again, I condemn the government's failure to listen. As soon as there is a chance to favour Bay Street over its competitors in the financial sector, the government seems to kowtow to the big Bay Street banks. That is unacceptable. That needs to change.
The framework will not be put in place until next fall. Why not take the summer to coordinate and build on a solid foundation rather than on such a shaky, poorly managed framework?
It is a disaster waiting to happen.
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- Jun/18/24 5:55:45 p.m.
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Madam Speaker, honestly, I have lost count of how many attempts this government has made to impoverish people, to make them feel insignificant. It is interfering in our most fundamental jurisdictions, in the areas that are the most important to us. In 2021, I realized just how important securities are to Quebec and how symbolic they are. I would like my colleague to expand on that.
When it comes to finance, the government and even the opposition present themselves as champions of the economy, but they forget that there is so much room for improvement. I am referring here to the securities framework, but also to capital gains. We made some intelligent proposals, but once again, we have not heard anything from the government. I would also like my colleague to comment on that.
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- Jun/18/24 5:56:40 p.m.
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Madam Speaker, I thank my friend, the member for Shefford, for her comments.
First, the capital gains tax comes into effect on June 25, but the bill does not yet exist. We are told that there will be a draft bill at the end of July and that it will not be introduced, debated and studied in the House until this fall. We certainly intend to make amendments to improve it. We will make sure that millionaires pay a higher tax rate than middle-class working people. That is not currently the case. We will also make sure that collateral victims get better protection than we expect to see in the bill.
Symbolism matters when it comes to Quebec's model for financial institutions, for securities, for the open banking system we are talking about here. The government symbolically recognizes the Quebec nation, but the more than 100,000 well-paid jobs at the Montreal Exchange and all the associated expertise, plus everything to do with insurance, is more than just a symbol to us. We do not want to be at the mercy of companies like Power Corporation, Sun Life or Canada Life. We see how badly that is working.
Quebec has expertise when it comes to the financial sector and insurance. We want to maintain that expertise. The federal framework allows it, but the pursuit of excessive centralization we see with this government and other governments we have here is hurting us. It is a constant struggle just to protect our turf.
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- Jun/18/24 6:00:46 p.m.
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Madam Speaker, I want to congratulate my colleague on his excellent speech. Personally, I think this is a case of major interference in Quebec's businesses and financial services. How does my colleague think the financial community in Quebec will react? What dynamic can we expect to see?
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- Jun/18/24 6:01:15 p.m.
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Madam Speaker, I thank my colleague and friend from La Pointe-de-l'Île for his intervention.
Yes, it is interference, and yes, it is a concern for provincially regulated financial institutions. Desjardins is subject to Quebec regulations. Representatives of Desjardins appeared before the committee and raised many serious concerns in their testimony. Federal governments of every political stripe always work for the big Bay Street banks at the expense of other players, such as credit unions or Desjardins.
If the government had any respect for the federative nature of the country we are currently in, it would never dream of interfering like this. First, it should negotiate, and then it should coordinate. That is all we are asking the government to do, but it refuses to do it. It always comes down to John A. Macdonald's great dream of a legislative union rather than a federation. That had no support back then, and it has none today either. The compromise was a federation where each government, each assembly, was sovereign in its own jurisdictions.
Rather than properly managing problems within its own jurisdictions, this government is trying to encroach on the jurisdictions of Quebec and the provinces. It is trying to boss them around and tell them what to do. It is trying to steal powers so it can turn the federation into a legislative union. It seems that Quebec, Quebec's specificity, no longer counts, even though the House has officially recognized Quebec as a nation. The government does not seem to be listening. That is unacceptable.
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- Jun/18/24 6:27:23 p.m.
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Madam Speaker, Quebec has a model that can also be found elsewhere in Canada, but it really is unique to Quebec. For example, a mechanic, a teacher or anyone, really, can invest in a duplex, triplex or fourplex that they will then often live in. The purpose of this investment is to cover their retirement costs. For 30 or 40 years, the person pays for the building, the investment, pays the taxes, does repairs and then, when the time comes to retire, sells it. The intention is to fund their retirement. Obviously, someone like that is not the same as an investor who flips real estate every year or someone who hides their money somewhere.
Does my colleague agree that these small investors, who would see their life's work reduced to almost nothing, should be better protected by the capital gains measures?
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- Jun/18/24 6:52:04 p.m.
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Madam Speaker, I congratulate my colleague on his French, and I salute all Franco-Manitobans.
We have heard several Liberal ministers say that they are going to take action to protect French in Quebec and that they recognize that French is in decline in Quebec. However, an analysis of the public accounts reveals that 94% of official language funding programs in Quebec are used to strengthen English and are paid to anglophone institutions and lobby groups. Nothing has changed. Nothing has changed in the action plan for official languages 2023-28.
Does my colleague think that continuing to contribute to the anglicization of Quebec will strengthen French outside Quebec?
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