44th Parl. 1st Sess.
February 29, 2024 10:00AM
- Feb/29/24 5:46:36 p.m.
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I would like to thank the hon. member for sharing yet another wonderful expression.
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- Feb/29/24 5:47:11 p.m.
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Madam Speaker, I appreciate the capacity crowd that is here tonight on this riveting PMB. This is indeed a very important moment in Canadian history.
This is a full-circle moment for me, because it allows me the opportunity to revisit the first time my words ever entered into Hansard, which would have been September 27, 2016. Also, when I was a city councillor, I provided testimony to OGGO, which had a special committee on postal banking. The reason I bring that up is because the hon. member for Bay of Quinte, whom I rather enjoy, does a phenomenal job of talking about all of the certitudes of capitalism, all the symptoms, ills and all the ways in which regulatory capture in cartels and monopolies shape our Canadian economy, and yet sometimes, well most of the time, in fact, all of the time, Conservatives just really seem to miss the target. While it is true we will likely be supporting this, I do not think that it actually speaks to the issue of the way in which the cartel banking system has captured the Canadian economy, and I will tell members why.
I come to my politics through observation. Back in 2014 when I was running to be a city councillor in Hamilton, my campaign office was right across the street from a payday loan company. At the end of every month, about a week to go in a month, I watched people start to enter payday loan centres. It was at that time I got to understand that most of the people who were entering those predatory, economically violent and, dare I say, extortionary businesses were already on a fixed income, many were already on social assistance, and many were hard-working people who just did not have enough money due to their legislated poverty to make it to the end of the month, and so they would visit these predatory loan companies.
In the process of trying to better understand the fullness of this economic violence on people, I came to understand that the Canadian Union of Postal Workers had presented what I thought was a very sound and fair banking policy: postal banking. The reason I bring this up on this PMB debate is because, yes, it is obvious that every consumer should have the right to have data sovereignty over their own information and that it should not be held hostage or be under some kind of extortionary measure by a cartel bank preventing them from transitioning seamlessly to another. That is a basic tenet of a fair economy and one that I think everybody should support, but it does not speak to the heart of the matter. If we are going to talk about open banking, what we need to talk about is decommodified banking for the most vulnerable among us. For example, a person receiving a social assistance cheque or ODSP who does not have the ability to actually have a bank account would then see that meagre $720 or $1,200, in Ontario, have fees added onto it.
When we talk about predatory violence, I look to the work of ACORN, which does incredible work on this and on fair banking. It has identified, quite rightly, the way easyfinancial, Money Mart and Cash Money charge interest on loans. For example, on a loan of less than $1,500 that is supposed to be paid back in two weeks, and we know that if a person on a fixed income does not have the money at the end of the month then that person would probably not have it in the months to come, the annual interest rates actually compound to somewhere between 400% and 600%. However, federally, we legislate extortion or loan sharking at 60% plus interest and other charges. So, when we see loans in this predatory sector go up 300% between 2016 and 2020, ACORN did the right thing and launched a campaign on this.
I am proud to say that another full-circle moment for me in this conversation was as a city councillor when I was responsible for moving a motion that actually created the first municipality in Ontario to regulate payday loans in our municipalities.
I am a proud Hamiltonian from Hamilton Centre, which is the birthplace of Tim Hortons. At its peak, there were more payday lenders in Hamilton Centre than there were Tim Hortons. Do members know who the president of the Payday Loan Association was at that time? Many members on the government's side will know this person well. It was Stan Keyes, a former Liberal member of Parliament who was basically shilling for the predatory and extortionary payday loan sector. What happened? By the time we were done with him, we had run him out of Hamilton. They had to change the name of that association.
Why do I bring it back to that? It is because the most vulnerable Canadians among us do not have to worry about whether or not they can move their information from bank to bank. They cannot even get into a bank. How can we enter into a conversation about open banking when not every Canadian has access to a bank?
I want to go back to the Canadian Union of Postal Workers. The Conservatives did the cut and gut on it and tried to privatize Canada Post. Then the Liberals, of course, followed suit shortly thereafter. They looked at ending door-to-door service and all the other things Canadians rely on. We took them to task, and the Canadian Union of Postal Workers came forward with a beautiful program called Delivering Community Power. Part of that plan was postal banking.
Members may or may not know this, but within the charter of Canada Post is the ability to offer postal banking. We cannot have a conversation about open banking unless we are providing banking for everybody in this digital economy. At a time when everybody relies on the ability to transfer monies to and from, it is not just about their information, but also about the freedom to have a decommodified banking sector.
When I say decommodified, I am referring to the cartels that we have allowed to be created in this country. This is where I will give credit to the member for Bay of Quinte because he understands the point, as I have heard him talk about it. The cartel here has created a scenario in an economy where we pay the highest interest rates on credit cards. We pay the highest amounts on service fees.
When I was a small business owner, I went in to do a cash deposit. I saw a $5 fee that said “CD Fee”. I asked them, “What the heck is this?” It was a cash deposit fee. A bank was charging me a $5-a-month fee to simply deposit cash into a bank account. That is preposterous. We need to rein this in, which is why this is a positive first step. However, any step, absent taking control of our banking sector from the regulatory capture of the five major bank cartels in this country, falls short.
We have an opportunity within the charter of Canada Post. We have infrastructure. I referred to Tim Hortons and how ubiquitous that is in Canada. Guess what? Across the country, dotting the country, there are small postal offices ready to deliver postal banking. For example, they are in the north, near indigenous, first nations, Métis and Inuit communities. They are already there, and all we have to do is give them the opportunity. We just have to give them the opportunity to provide basic banking services to people.
This is so that, if someone is on a fixed income and receiving their monthly social assistance, whether it is Ontario Works or ODSP, rather than being extorted by the payday loan sector, they could go into their local post office, take that money out and try to keep up in an economy that is leaving far too many behind.
It is laudable what my friend from Bay of Quinte is doing, who I consider to be a learned member of Parliament and somebody who understands the harms caused by capitalism. I would challenge him to go further than just tinker around the edges of an open banking system and let us go all the way. Let us go all the way and open up banking for Canadians from coast to coast to coast, regardless of how much money they have and regardless of where they live.
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I have the honour to inform the House that a message has been received from the Senate informing the House that the Senate has passed the following bill: Bill C-62, an act to amend an act to amend the Criminal Code, medical assistance in dying, no. 2.
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- Feb/29/24 5:56:57 p.m.
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Madam Speaker, I will start my speech with a couple of important messages.
Recently, we saw the passing of Daryl Kramp, who was an amazing member of Parliament and a personal mentor to myself. I give my best to his family going forward. He was a legend of a man who really contributed to his family, to his community and to this place as well.
I would also like to give a shout-out to the member for Elmwood—Transcona. He has announced his resignation from this place. He was a treat and a treasure to work with at the finance committee. He was always well prepared and always dedicated to the people of his riding.
With that, I will start my talk on open banking. Open banking is an area where Canada should be focused. As I have stated numerous times, Canada has a productivity crisis. We are said to be one of the lowest productivity countries in the world. In fact, we are on a trajectory, if this continues on this path, where we will not even be considered an advanced economy anymore. We have such low levels of productivity relative to the United States and other countries. Open banking is low-hanging fruit. It is a relatively easy fix for the government to lift up our productivity. I will unpack what I mean by that.
First, I want to talk specifically about the member for Bay of Quinte's private member's bill, which would force the government to do a couple of things. The first would be, within six months, to implement open banking, and the second would be to make public a report that was produced for the finance department. These are absolutely critical steps to pushing this along.
What is open banking, or consumer-led banking? Let us start there. It is the ability for clients to own their own data and to move their own data to the financial institutions that they choose. Currently, we have a system for transferring data within financial institutions that is not much above an abacus. It actually involves the transfer of paper, physically bringing documents and transferring one's data to other financial institutions.
This creates barriers for people to transfer their financial data from one institution to another. Like most Canadians, I have a number of payees on my online banking, and I have information saved on there. It would literally take me hours to rebuild that data and to move that data to another financial institution. That creates a barrier so that Canadians do not shop for the best rates. I would disagree with my colleague who spoke prior to me, although I respect him. We have different perspectives, but we want to get to the same place.
It is my heartfelt belief, as I believe it is for most Conservatives, that competition is the way to bring fairness to the banking system. Ultimately, it is about having a level playing field where we have small, big and medium-sized players all competing for Canadians' business and where we will have success. Open banking structures that playing field. While I would disagree with the member that we do not need direct government intervention, what we do need is government to set in place the legislative framework for institutions to be able to compete fairly.
In the failing of doing that, what we actually have is a cumbersome system where Canadians cannot transfer their financial data. This means that if people get a bill from whatever major bank, see that their fees were $50 and think it is unfair, then in an open banking system we would be able, with a couple of clicks of the mouse, to make those banks work for our business, as opposed to people working for them.
Everywhere open banking has been tried, it has been tremendously successful on a number of fronts, and one is affordability. As I said, competition is the magic elixir, the magic pill that would fix many ails in the economy. It makes businesses compete for people's business. It lowers costs and improves services to deliver better value. In an open banking system, everywhere it has been tried, it has driven down the costs for consumers.
Canadians pay billions and billions of dollars every year to financial institutions. For that, they are, relative to their competitors across the world, not, in my opinion, getting the best value. In order to increase that value, to get that better value, we need to enable competition, but right now, as I said, the cumbersome system of data transfer is preventing that competition from occurring.
I actually believe it could be great for our banks and great for our financial institutions, because it would make them stronger. It would make them compete.
Ultimately, we want Canadian businesses, large, medium and small, to succeed, not only here in Canada but across the world. If they are put in an arena here in our country where they become stronger and better able to compete globally by having strong domestic competition, they are then strengthened and able to bring some of that great Canadian know-how, some of that great Canadian entrepreneurship, across the world.
The other area where it will help our economy is with respect to entrepreneurship. Right now, in Canada, as I said, we are unfortunately one of the lower-productivity countries in the OECD and forecast to be one of the lowest for the foreseeable future.
Just to give an idea, we measure it by GDP per hour, per worker. That is the general stat, the metric by which it is measured. Canada is down around $50 per worker. The U.S. would be at $75. Countries like Switzerland are up at over $100 per hour, per worker, so we have a substantial problem.
One of the issues that we have is, of course, competition, which I have talked about, but also growing our new and small businesses, our innovators, to take that next level.
The challenge is that they often, in the Canadian finance ecosystem, find it challenging to obtain proper financing, to grow from that small business, that idea, into a big business. What happens is that many of those small businesses actually have to leave our country to attract the financing they need.
They go all over, around the world, of course, most notably to Silicon Valley down in the United States, but also all over the world, to where they can attract more capital.
What open banking does is to allow greater transparency at the request of the business or the individual, which gives the bank or the financial institution or the lender of any sort greater confidence in lending that money out to these institutions, and gets it to them more quickly.
Often, especially in the tech space, technologies like artificial intelligence are not changing by the year or even by the month or even by the week. It is a daily thing. One needs to get that financing, that cash, to those businesses as quickly as possible. Currently, in the financial ecosystem, we hear story after story that innovators are not getting that capital quickly enough.
Just to give a quick story, a friend of mine is an individual who came over here to Canada as a refugee from abroad. He actually went and got his Ph.D. and was in an IT field and desperately wanted to give back to the country that had given so much to him. It broke his heart that he ended up having to move to the United States because there just was not the financing here for his idea.
He was the number seven employee in a company that went on to be worth billions of dollars. That could have been done right here, right in Canada.
I think this is a fantastic bill. I think the member for Bay of Quinte has done a great service for his community and for Canada. I believe we should give it unanimous support to get this bill through as quickly as possible, so that we can increase the competitiveness of the Canadian economy and improve affordability in the Canadian financial sector. We owe it to Canadians to get this done and to get it done quickly.
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Mr. Speaker, I am pleased to have the opportunity today to participate in the debate on Bill C-365, an act respecting the implementation of a consumer-led banking system for Canadians. This is a private member's bill.
Bill C-365 would require the Minister of Finance to table in each House of Parliament, within 30 days of the bill's passage, a plan to implement an open banking system in Canada and a bill to implement an open banking system in Canada within six months. I could stop there, because that is a plan that would see the government move more slowly on open banking than it already is. The Minister of Finance has already announced that budget 2024 will include legislation for the implementation of consumer-driven banking.
Instead, I will take a moment to underline the importance of this file and why we should reject a private member's bill that would impose a lax deadline and no details on the implementation of a consumer-driven banking regime. Consumer-driven banking, also known as open banking or consumer-driven finance, refers to systems that allow people and businesses to securely transfer their financial data to different financial services providers, such as apps that use data to provide automated budgeting and savings advice. Individuals can access services that allow them to build their credit by proving they have paid rent on time, for example.
It is expected that consumer-driven banking would empower Canadians to securely access and share their financial data, ensure that Canadians are not subject to fees when accessing and sharing their data, protect Canadians and the financial system from risky practices like screen scraping, ensure that parties at fault are liable for any damages or data breaches, and allow Canadians to safely access innovative products and services that can help them improve their financial outcomes.
The issue now is that without consumer-driven banking, Canadians, by default, currently share their banking credentials with entities other than their bank in order to access data-driven financial services, while there are no rules around the practice. This can be worrisome for many Canadians. Personally, it makes me feel uneasy. Like many other Canadians, I am concerned that the non-secure, unregulated practice called screen scraping leaves us open to security, privacy and liability risks in the event of data breaches or losses. That is why giving Canadians control over their own financial data is so important.
That is exactly what our government wants to do. Indeed, we support the implementation of consumer-driven banking. We have already made a lot of progress in this direction. However, such a system needs to be defined by clear rules to protect consumers.
Last fall, the Minister of Finance indicated in the 2023 fall economic statement that the government intends to introduce framework legislation for implementing consumer-driven banking in the 2024 budget. This framework legislation will propose a phased-in approach to scope, oversight of the technical standard, and a timeline for phasing out screen scraping.
In line with international best practices, the aim of our legislation will be to codify key elements including scope, common rules for addressing liability, privacy, security, accreditation and management of technical standards; mandate a government-led governance entity responsible for monitoring and supervising the system, enforcing common rules, accrediting and updating mandated technical standards; and address liability among industry participants.
Our work will be framed by three major policy objectives. First, we are aiming to ensure the continued safety and soundness of the financial sector by addressing the security risks arising from existing data sharing practices such as screen scraping, and by establishing oversight of financial data sharing activities. Second, we want to ensure that Canadians can securely and confidently access and use their financial data to improve their financial outcomes. Third, we want to establish a cohesive framework with a clear, fair and transparent approach to accreditation, to support the continued security and stability of the Canadian financial sector, including existing financial institutions.
It is important for our government to ensure Canadians benefit from effective oversight of financial data sharing. That is why our framework will mandate a government-led entity to supervise and enforce the framework.
To facilitate oversight of provincial entities while respecting their jurisdiction, a model that permits provincial entities to opt in to governance, supervision and participation will be developed.
Naturally, governance design is key to ensuring the framework achieves the public policy objectives, which in this case are safety, stability, innovation and utility for all Canadians.
With a strong governance framework, we will be able to ensure participants abide by common rules by outlining clear roles and responsibilities for participants and government, and what actions will be taken when non-compliance occurs.
I am glad to see that, after significant consultation and review, there is now broad alignment among stakeholders with the government's proposed approach. The day after the fall economic statement, the Canadian Bankers Association was quoted as saying that it welcomes “the clarity provided in the Fall Economic Statement” and that it will “continue to work collaboratively with the government on implementing a consumer-driven banking regime in Canada.”
Furthermore, Canadian fintechs were also reported to be supportive of the government's plan, as outlined in the fall economic statement and policy statement. The framework proposed by our government aligns with those of our largest trading partners, including the United States.
As members can see, consumer-driven banking is something that we support and are acting on. This framework is necessary to establish a system that enables secure financial data sharing. The Minister of Finance has already announced that budget 2024 will include legislation for the implementation of consumer-driven banking.
In order to do that, we continue to work closely with industry, federal regulators, provincial and territorial governments and other stakeholders.
It is clear that, with all the progress we are making on creating a consumer-driven banking system, Bill C-365 is not necessary. It will be obsolete before it is even voted on.
That is why I will vote against Bill C-365, and I invite my hon. colleagues to do the same.
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- Feb/29/24 6:14:58 p.m.
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I recognize the hon. member for Bay of Quinte for his right of reply.
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- Feb/29/24 6:15:14 p.m.
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Mr. Speaker, it has been a pleasure to hear the debate and to present my first private member's bill when it comes to open banking here in Canada.
This bill was to do two thing. It was to ensure that we provide the opportunity for businesses to participate in Canadian banking, in fintechs, and it was also to ensure the government did what it promised.
Before I start that, I just want to make a quick comment. The Right Honourable Prime Minister Mulroney has passed away, and to his family, to Caroline, to Ben and others, I give our sincere condolences. A favourite quote of mine from Brian Mulroney was, “Canada must strive to be a beacon of hope, a model of prosperity, and a nation that works for all its citizens. ” Rest in peace, to Brian Mulroney.
I am encouraged by the speeches tonight by the members for Hamilton Centre and Jonquière, who talk about the need for open banking. We brought this bill forward because it has taken six years to get legislation promised to Canadian fintechs and to Canadians themselves to get competition in Canada. Canada has a monopoly problem. We have a major problem, where we have major regulations that ensure we have oligopolies and monopolies in the grocery sector, and we are paying some of the highest prices in the world in the airlines, in telecommunications and in banking.
The solution to banking is open, or consumer-led, banking. This bill would do two things. It would ensure there is legislation presented within six months, and it would make the government table a report that has been on the minister's desk since May 2023. For six years, we have been waiting.
Canadians and fintechs are saying one thing, and one thing very clearly, to me; they cannot wait anymore. They do not believe the Liberal government will present this legislation in the March budget, even though it has been in the fall economic statement. They do not believe that it may even be in the next fall economic statement. By passing this bill, parliamentarians can ensure that open banking comes before discussion in the House of Commons and also in the other House. In doing so, we would help the fintechs that are desperately asking us to ensure we get open banking implemented in Canada.
Those fintechs are providing good wages at a time when start-ups in Canada are low, and we need more businesses with more powerful paycheques. More importantly, Canadians need better options for banking. I heard my colleague, earlier, talk about different options for all types of Canadians for banking. There is a company called Borrowell that actually has a fintech app, through open banking, which actually builds credit scores by tracking one's payment of rent. That is a great example of what a fintech business and what open banking would do for all Canadians.
More importantly, this bill would ensure that we could fix the problem in banking. One-third of Canadians are upset with their banking institution, 70% of Canadians have had the same bank account for 11 years, and 80% of Canadians have never switched bank accounts. We have a major oligopoly problem in Canada, with five Canadian banks now controlling 90% of mortgages and with HSBC being bought by RBC.
This bill would create competition, and when there is competition in Canada, that gives benefits through freedom of choice to Canadians and that gives them savings. In the U.K., with the bank accounts for people living in the U.K., they pay zero dollars for transactional fees, zero dollars for overdraft fees and zero dollars for monthly fees. Canadians would save $400 a year if this is implemented.
I am happy to see the discussion. I am hoping to see that we get the vote through Parliament so that we can talk about open banking in this place and in the Senate. We can help fintechs, but more importantly, help Canadians. Let us bring open banking and consumer-led banking, and let us bring it home.
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- Feb/29/24 6:19:32 p.m.
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The question is on the motion.
If a member participating in person wishes that the motion be carried or carried on division, or if a member of a recognized party participating in person wishes to request a recorded division, I would invite them to rise and indicate it to the Chair.
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- Feb/29/24 6:20:07 p.m.
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Mr. Speaker, we request a recorded division.
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- Feb/29/24 6:20:12 p.m.
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Pursuant to Standing Order 93, the division stands deferred until Wednesday, March 20, at the expiry of the time provided for Oral Questions.
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Mr. Speaker, it is obviously with great regret that this House has learned of the passing of Canada's 18th prime minister, the Right Honourable Martin Brian Mulroney.
Obviously, all members join us in wishing the Mulroney family our deepest sympathy at this time as they deal with the loss of this great statesman, who has done so much for our country. I join all Canadians in offering our condolences. Out of respect, I would like to seek unanimous consent for the following motion. I move:
That, notwithstanding any standing order, special order or usual practice of the House:
(a) the motion respecting Senate amendments to Bill C-35, An Act respecting early learning and child care in Canada, be deemed adopted; and
(b) this House do now adjourn.
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- Feb/29/24 6:21:30 p.m.
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All those opposed to the hon. member's moving the motion will please say nay.
It is agreed.
The House has heard the terms of the motion. All those opposed to the motion will please say nay.
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- Feb/29/24 6:22:25 p.m.
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My condolences to the family of the Right Honourable Brian Mulroney.
It being 6:23 p.m., the House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).
(The House adjourned at 6:23 p.m.)
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