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Decentralized Democracy

House Hansard - 270

44th Parl. 1st Sess.
January 29, 2024 11:00AM
Context: House Hansard - 270 - Jan/29/24
Mrs. Rachael Thomas (Lethbridge, CPC)
  • Jan/29/24 2:40:51 p.m.
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Mr. Speaker, there is the government's false perception of reality, and then there is the reality that everyday Canadians are experiencing. I would invite the hon. member to consider what that reality actually is. If she could only come down from her high horse and enter the everyday life of Canadians, she might understand that not everyone lives in downtown Toronto and has access to the luxuries she does. Canadians are struggling. They are struggling to put food on their tables. They are struggling to pay their heating bills. They are struggling to be able to care for their families. Record numbers of Canadians are using food banks, and that has a lot to do with the carbon tax, which is scheduled to increase on April 1. Will the government axe the tax?
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Context: House Hansard - 270 - Jan/29/24
Mr. Ryan Williams
  • Jan/29/24 7:10:20 p.m.
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Madam Speaker, the members may want to listen to this because we are in the worst housing crisis in the history of this country right now and the worst housing bubble in the whole world. In eight years, rent has doubled, mortgages have doubled and the amount needed for a down payment has doubled. Sixty-six percent of the average Canadian income is needed now to pay for a mortgage payment. A down payment in Toronto averages $220,000, and in Vancouver it is $237,000. It takes 25 years to save up for a down payment when it used to take 25 years to pay off a mortgage. Tent cities are popping up all over Canada, not only in major cities, but also in rural cities like my hometown of Belleville, Ontario. In 2015, the Prime Minister made an election promise to expand the the learn to camp program, which, when he was elected, was meant to help Canadians camp. However, Canadians did not have in mind that they would not be camping in the wilderness for fun, but on public land just to survive. This is a distinct Canadian problem. Canadian housing prices are 45% to 75% higher than our American counterparts. A lot of the time in border cities the prices are 100% higher. Canada built fewer homes than it did in 1972, which was 50 years ago. When it comes to HSBC, it was a competitor. Most importantly, it was a competitor in the areas of Vancouver and Toronto. It held 10% of Vancouver's mortgage book and 5% of Toronto's. These are areas that are some of the most expensive and unaffordable in all of Canada. When it provided rates, if we want to talk about a scrappy competitor, a month and a half ago it provided five-year variable mortgage fixed rates at 6.4%. If we compare that to RBC at 7.15%, it means that HSBC would save a family with a half a million dollar mortgage $312 a month, and good luck having a half a million dollar mortgage in Vancouver. When we look at the number one bank, RBC, with $1 trillion in assets under management and total assets of $2 trillion, buying the number seven bank, HSBC, with $120 billion in assets and 800,000 mortgage customers, we have taken that competitor out of the market and given it to the largest bank, making that oligopoly and monopoly larger. However, there was a fail-safe: the regulator. How the Competition Act failed to protect consumers was that the minister, the regulator, could have rejected this deal on behalf of Canadians who are in the worst housing crisis this generation and country has ever faced. However, she approved the deal to protect HSBC from having to find another buyer or, at the very worst, having the remaining banks competing for its clients. I say that she approved it because we had a debate schedule in December. We passed a motion at the finance committee, which was approved, to reject the merger, to have real debate, and again the NDP shut down debate and stopped us from having a debate before the merger was approved by the finance minister. It will be going through in March. The NDP member for Elmwood—Transcona shut down debate in the House of Commons. At the end of the day, we have to look at why. When we look at Vancouver and B.C. mortgage holders who are having a tough time making their mortgage payments as a whole, but are really trying to find ways to keep their homes, why would the government approve a merger that would raise prices for those consumers? This happens all the time with a monopoly. Dozens of studies now show that, every time a merger goes through, prices go up. More importantly, this is the comment I have for the NDP. More studies now are showing that, through oligopolies and mergers, wages are going down. Dozens of studies now document how monopolies and oligopolies are driving income inequality. An OECD study of seven European nations found that oligopolies reduced wages an average of 7% overall, but 13% for the working class. A U.K. Competition and Markets Authority study published a report last week that said that there is mounting evidence of suppressed wages from labour market concentration, or oligopolies, and wages are on average 10% lower in the most concentrated markets. Economists in the U.S. found that going from a very competitive industry to an oligopoly resulted in a 15% to 25% reduction in wages for workers. Therefore, this vote and this debate to allow an oligopoly to get bigger, and it is not just about prices, which are really important, is about wages in a country that cannot afford any more wage erosion. That is easy to see. We can go all the way back to 1776 when Adam Smith wrote The Wealth of Nations. For those who have never studied this, he talked about the invisible hand. If there are many buyers and sellers, price is negotiated and price goes down. It is the same thing for wages with the invisible hand. When there are many employees working for the same employer, with competition and the invisible hand, wages go up, but when the invisible hand is eliminated, it means we create monopolies and oligopolies. With the invisible hand, losing those employers and concentrating that, we not only have high prices, but low wages, and that is what the NDP supported when it adjourned this debate. At the end of the day, monopolies and oligopolies are destroying the economy and the way of life of Canadians. Because I have the option, I am going to talk about what happened since the minister approved this merger. HSBC had variable mortgage fixed rates at 6.4%, which was pretty low compared to RBC at 7.15%. Since the merger has been approved, those rates went to 6.55%, meaning it just cost a Vancouverite $750 a year on a half-million dollar mortgage. It is not hard to see since the evidence is barely a month old that approving mergers and acquisitions, concentrating our banking industry in the hands of a few, hurts consumers. I shudder to think how this is going to affect workers going forward. It is not just one industry, as I have indicated. The banking industry has concluded that this merger should never have gone through, but it is following another merger that is giving pains and fits to Canadians at a time when they should not be seeing increased costs. There is the cellphone industry and the merger between Rogers and Shaw. There was an announcement only about three weeks ago that Rogers is increasing its prices by 9%. The average monthly cellphone bill for Canadians is $106. Australians pay $30 a month. Canadians, who are already paying the highest cellphone bills in the world, are going to have their bills increased by Rogers and Shaw by $9 a month, which is 14.5%. At the end of the day, Canadians are going to be paying four times what Australians pay for cellphone bills. That is for 50 gigabytes a month and unlimited talk and text, the minimum that Canadians are looking for just to survive. When we talk about cellphone bills, we need to talk to our families and friends, and talk about education, job and workplace navigation, but also safety. Cellphones are what saved Canadians when they got alerts this summer, if they could get alerts during the Rogers outage, when the wildfires were raging across this country. At the end of the day, the RBC-HSBC report from the Competition Bureau stated that the HSBC company was a scrappy competitor and that there were high barriers for other companies to get in. It talked about low and flexible mortgage rates. Leaders in Vancouver say that in losing HSBC, they are losing a company that donated locally to many charities and organizations. They talk about a head office that is not guaranteed to be there after two years or even six months. That is going to disappear and it is a loss for Vancouver. Of course, these things are lost when we look at what oligopolies want and we are not looking after Canadians. More importantly, we are losing start-ups. Canada has 100,000 fewer start-ups and entrepreneurs compared to 20 years ago, despite our population growing by 10 million people, and it is easy to see why. When we consolidate these industries, we block new competitors from coming in. I have a consumer-led banking bill that is coming up this Thursday that would give an option for that. Instead of protecting the oligopolies, it would allow many new entrepreneurs and financial tech organizations to compete with banking. It would do one thing: create competition in banking. In the meantime, the government held that back six years and yet it approved the HSBC-RBC merger within several months. The Competition Bureau knows that competition is broken because it wrote a report on it. It said that from 2000 to 2020, the concentration rose in the most concentrated industries, the top firms are less and less challenged, fewer firms have entered industries and we are seeing profits and markups rise. We see that prices are up and wages are down. Nobody wins with oligopolies and monopolies. At the end of the day, Canada only wins when we have new start-ups, new entrepreneurs and many industries competing for Canadians' dollars because that is how we drive prices down, that is how we create Canadians jobs and that is how Canadians win. The government has failed Canada by supporting our uncompetitive monopoly problem. When we say monopoly, which is what we use interchangeably, we think of the board game. We all learned young what happens when someone owns all the railroads or all the utilities, or they own one block of properties. If someone owns one block of coloured-coded properties, the rent doubles right away, and we have seen that happening in Canada. Monopolies and oligopolies result in higher prices, less service, lower wages, greater wealth inequality, and lower productivity and innovation. We should be embracing competition. We should be ensuring that we create Canadian companies. We should be leading the world in IP commercialization, meaning we have companies that create great ideas as we have done in the past, and then commercialize that to create paycheques and great wealth. However, the government is intent on protecting oligopolies and monopolies, and really protecting what these big companies and their shareholders want, rather than Canadians and stakeholders. The only answer is to push forward quickly with consumer-led banking to create competition in the banking sector and hopefully we are going to allow some good news for Canadians in a whole lot of hurt. Before I finish, I want to move an amendment. I move: That the motion be amended by deleting all the words after the word “That” and substituting the following: “the 12th report of the Standing Committee on Finance, presented on Wednesday, November 1, 2023, be not now concurred in, but that it be recommitted to the Standing Committee on Finance for further consideration, in light of the recent decision of the Minister of Finance to approve the RBC-HSBC merger, despite the finance committee's unanimous decision, on October 23, 2023, calling for the merger to be rejected, and to allow the House an opportunity to pronounce itself on this merger before the ratification process is completed.” The hon. member for Beauce will second it.
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