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House Hansard - 288

44th Parl. 1st Sess.
February 29, 2024 10:00AM
Context: House Hansard - 288 - Feb/29/24
Mr. Philip Lawrence (Northumberland—Peterborough South, CPC)
  • 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.
1390 words
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