Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue 20 - Minutes of Proceedings
OTTAWA, Wednesday, April 18, 2007
(38)
[English]
The Standing Senate Committee on Banking, Trade and Commerce met in camera at 4:15 p.m., this day, in room 9, Victoria Building, the Chair, the Honourable Jerahmiel S. Grafstein, presiding.
Members of the committee present: The Honourable Senators Angus, Biron, Grafstein, Massicotte, Moore, Ringuette and Tkachuk (7).
Other senator present: The Honourable Senator Cordy (1).
In attendance: June Dewetering and Philippe Bergevin, Analysts, Library of Parliament.
Also in attendance: The official reporters of the Senate.
Pursuant to the Order of Reference adopted by the Senate on February 28, 2007, the committee continued its study of Bill C-26, to amend the Criminal Code (criminal interest rate). (For complete text of the order of reference, see proceedings of the committee, Issue No. 16.)
At 4:15 p.m., the committee proceed in camera pursuant to rule 92(2)(e) to consider a draft agenda.
At 4:35 p.m., the committee proceed in public.
At 4:35 p.m., it was agreed that the committee proceed to clause-by-clause consideration of Bill C-26.
It was agreed that the title stand postponed.
It was agreed that clause 1 carry.
It was agreed that clause 2 carry.
It was agreed that the title carry.
It was agreed that Bill C-26, An Act to amend the Criminal Code (criminal interest rate), be adopted without amendment and with the following observations.
``The Standing Senate Committee on Banking, Trade and Commerce has the honour to report Bill C-26, An Act to amend the Criminal Code (criminal interest rate), without amendment, but with the following observations.
The Committee has decided to report Bill C-26 without amendment, even though we have reservations about the Bill as drafted, because of the following factors.
First, the Committee unanimously supports measures designed to facilitate the protection of consumers in respect of payday loan services and does not wish to delay access to legislated protection for these borrowers, some of whom we believe to be vulnerable. We have some familiarity with the section of the Criminal Code that would be amended by the Bill as well as with issues related to payday lending. In particular, in 2005, we examined a bill proposed by our former colleague, Senator Plamondon, which also sought to amend section 347 of the Criminal Code, and — in the context of our study of consumer protection in the financial services sector — heard from witnesses on the subject of alternative financial service providers, particularly payday lenders.
We continue to be somewhat puzzled by the reasons underlying the rapid growth of the payday lending sector. This growth suggests that the services provided by such lenders are needed by consumers. Important considerations for us are the reasons for the emergence and growth of this sector as well as what appears to us to be a lack of involvement by chartered banks in short-term, low-value lending.
During its recent presentation to us on Bill C-37, the Canadian Bankers Association indicated that it, too, is perplexed. It also indicated that the chartered banks provide a range of credit options on a short-term basis. Nevertheless, the Committee believes that the payday lending sector's growth may be related, in part, to a relative unwillingness by Canada's chartered banks to lend to certain borrowers, who then become customers of payday lenders. Consequently, we urge Canada's chartered banks — which are federally regulated, belong to an independent complaint resolution mechanism, and are involved in some aspects of financial education — to begin making short-term, low-value loans.
Moreover, we believe that implementation of the proposed legislation could result in the federal government granting exemptions to designated provinces with insufficient assurances that provincial actions would provide the level and nature of consumer protection in this sector that this Committee seeks. As well, there is no assurance that all provinces will enact protection measures following enactment of this legislation. Finally, we are concerned that a patchwork of non-uniform protection measures could develop across the country.
Thus, we urge provinces, in adopting consumer protection measures pursuant to this Bill regarding the payday lending sector, to include minimum requirements in at least the following areas: limitations on rollovers and back-to-back loans; mandatory participation by payday lenders in an independent complaint resolution mechanism; mechanisms ensuring full and accurate disclosure of contract terms; acceptable debt collection practices; and a right for the borrower to rescind the loan and obtain full reimbursement no later than the end of the day following the making of the loan. Efforts made by payday lenders in the area of consumer financial education would also be welcome.
Consistent with the Committee's mandate, we will continue to monitor developments in the payday lending sector, and hope that the enactment of Bill C-26 will allow effective protection to consumers. In our view, if the provinces fail to meet minimum standards in the areas indicated above, the federal government should take appropriate legislative action.''
It was agreed that the Chair report Bill C-26 without amendment to the Senate.
At 5 p.m., pursuant to the Order of Reference adopted by the Senate on April 17 2007, the committee began its study of Bill C-36, to amend the Canada Pension Plan and the Old Age Security Act.
APPEARING:
The Honourable Monte Solberg, P.C., M.P., Minister of Human Resources and Social Development.
WITNESSES:
Human Resources and Social Development Canada
Susan Scotti, Assistant Deputy Minister, Social Development Sectors Branch;
Marla Israel, Acting Senior Director, Seniors and Pensions Policy Secretariat;
Nancy Lawand, Director General, Canada Pension Plan Disability Directorate;
Suzan Kalinowski, Senior Policy Analyst, Income Security, Department of Finance.
At 5 p.m., Minister Solberg made a statement and, together with the other witnesses, answered questions.
At 6:15 p.m., the committee adjourned to the call of the Chair.
ATTEST:
OTTAWA, Thursday, April 19, 2007
(39)
[English]
The Standing Senate Committee on Banking, Trade and Commerce met at 11 a.m., this day, in room 9, Victoria Building, the Chair, the Honourable Jerahmiel S. Grafstein, presiding.
Members of the committee present: The Honourable Senators Angus, Biron, Cordy, Eyton, Grafstein, Harb, Massicotte, Moore, Ringuette, Segal and Tkachuk (11).
In attendance: Philippe Bergevin, Analyst, Library of Parliament.
Also in attendance: The official reporters of the Senate.
Pursuant to the Order of Reference adopted by the Senate on April 17 2007, the committee continued its study of Bill C-36, to amend the Canada Pension Plan and the Old Age Security Act.
APPEARING:
The Honourable Monte Solberg, P.C., M.P., Minister of Human Resources and Social Development.
WITNESSES:
Human Resources and Social Development Canada:
Susan Scotti, Assistant Deputy Minister, Social Development Sectors Branch;
Marla Israel, Acting Senior Director, Seniors and Pensions Policy Secretariat;
Nancy Lawand, Director General, Canada Pension Plan Disability Directorate;
Suzan Kalinowski, Senior Policy Analyst, Income Security, Department of Finance;
Ross MacLeod, Associate Assistant Deputy Minister, Processing and Operations, Service Canada.
Office of the Superintendent of Financial Institutions Canada:
Jean-Claude Ménard, Chief Actuary.
Federal Superannuates National Association:
Bernard Dussault, Senior Research and Communications Officer.
Association québécoise de défense des droits des personnes retraitées et préretraitées:
Henri Salembier, National President;
Claude Major, Director General.
At 11 a.m., the Minister, together with the other witnesses, proceeded to answer questions.
At 11:40 a.m., Mr. Dussault and Mr. Salembier each made a statement and, together with Mr. Major, Mr. Ménard and Ms. Israel, answered questions.
At 12:50 p.m., it was agreed that the committee proceed to clause-by-clause consideration of Bill C-36, to amend the Canada Pension Plan and the Old Age Security Act.
With leave, it was agreed that the committee group the clauses of the bill for consideration.
It was agreed that the title stand postponed.
It was agreed that clauses 1 to 14 amending the ``Canada Pension Plan'' carry.
It was agreed that clauses 15 to 35 amending the ``Old Age Security Act'' carry.
It was agreed that clauses 36 to 38 the ``Transitional Provisions'' carry.
It was agreed that clause 39 the ``Coming into Force'' carry.
It was agreed that the title carry.
It was agreed that Bill C-36 carry.
It was agreed that the Chair report Bill C-36, to amend the Canada Pension Plan and the Old Age Security Act, without amendment to the Senate.
At 1:05 p.m., the committee adjourned to the call of the Chair.
ATTEST:
Line Gravel
Clerk of the Committee