Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue 1 - Evidence - June 16, 2011
OTTAWA, Thursday, June 16, 2011
The Standing Senate Committee on Banking, Trade and Commerce met this day at 10:45 a.m., pursuant to rule 88 of the Rules of the Senate, to organize the activities of the committee.
[English]
Adam Thompson, Clerk of the Committee: Honourable senators, I see quorum. As clerk of your committee it is my duty to preside over the election of the chair. I am prepared to receive motions to that effect.
[Translation]
Senator Hervieux-Payette: I move that Senator Meighen do take the chair.
Mr. Thompson: Are there any other nominations?
Moved by the Honourable Senator Payette that the Honourable Senator Meighen do take the chair of this committee.
[English]
Is it your pleasure, honourable senators, to adopt the motion?
Hon. Senators: Agreed.
Mr. Thompson: I declare the motion carried and invite Senator Meighen to take the chair.
Senator Michael A. Meighen (Chair) in the chair.
The Chair: I will try and follow the example of our new clerk in acting as chair: fair, succinct and efficient. You have all met Mr. Thompson before. I welcome him formally to the committee.
I want to thank honourable senators for their confidence and support, I appreciate it very much. I have enjoyed working on this committee for many years, being its chair for a few. I have particularly appreciated the spirit in which we have worked. We have not always agreed and, even through our occasional dust-ups, relations were maintained on a cordial level among everyone. That is something I personally value very highly. Thank you for that.
I trust and expect the same spirit of collegiality will continue in the future.
We have a great committee, I think. We have a couple of newcomers: Senator Stewart Olsen, welcome to you; and Senator Tkachuk is back in harness, I think, but he is not here. Are there any other new members? I do not think so. Senator Ringuette will be back on board, and everyone else, Senator Gerstein, Senator Oliver, Senator Greene and Senator Moore. Senator St. Germain you are substituting for whom today?
Senator St. Germain: Senator Tkachuk.
The Chair: Let me go to my crib notes here. It falls to us to elect a deputy chair. Do I have a nomination?
Senator Greene: It is my honour and privilege to nominate Madam Hervieux-Payette as deputy chair.
The Chair: Nominated by Senator Greene that Senator Hervieux-Payette be nominated as deputy chair of the committee.
[Translation]
Are there any other nominations?
[English]
There being no further nominations, I declare Senator Hervieux-Payette elected deputy chair of the committee. Welcome.
Next we have the Subcommittee on Agenda and Procedure, which is a fancy name for the steering committee. Would someone care to move the Subcommittee on Agenda and Procedure as itemized here?
Senator Moore: I so move.
The Chair: Moved by Senator Moore. Any discussion? All in favour?
Hon. Senators: Agreed.
The Chair: Do we have to name those at this point?
Senator Oliver: After the usual consultation.
The Chair: I could do that very quickly because I know the answers.
In view of our motion, you know two of the members of the committee on agenda and procedure; Senator Hervieux-Payette and I. There is one other member to be designated. After the usual consultation, I am pleased to announce to senators that Senator Larry Smith has agreed to take on this onerous task.
[Translation]
Senator Hervieux-Payette: We will have meetings in French. That is fantastic.
The Chair: Yes, and for the first time in a long time.
[English]
The Chair: You have large shoes to fill, of course. Senator Gerstein was your predecessor. You can count on him, I am sure, for good advice from time to time.
Number 4, motion to publish the committee's proceedings. Does anyone care to move that motion?
Senator Stewart Olsen: So moved.
The Chair: Thank you very much, Senator Stewart Olsen.
Is there any discussion? In all in favour?
Hon. Senators: Agreed.
The Chair: Carried.
The next motion relates to the authorization to hold meetings and to receive evidence when quorum is not present.
Senator Oliver: So moved.
The Chair: Thank you, Senator Oliver.
Is there any discussion? All in favour?
Hon. Senators: Agreed.
The Chair: Carried.
Item 6, financial report; a motion that we adopt the draft first report prepared in accordance with rule 104.
Has that been circulated?
Mr. Thompson: It has.
The Chair: Is there any discussion on that report? See how frugal we are.
All in favour?
Hon. Senators: Agreed.
The Chair: Carried.
Motion 7, research staff, is the standard motion, as I understand it.
Senator Moore: So moved.
The Chair: Thank you, Senator Moore.
Is there discussion? If not, all in favour?
Hon. Senators: Agreed.
The Chair: Carried.
The next motion concerns the authority to commit funds and certify accounts. Does someone care to move that motion?
Senator Stewart Olsen: I so move.
The Chair: Thank you, Senator Stewart Olsen.
Is there discussion? All in favour?
Hon. Senators: Agreed.
The Chair: Carried.
Next is travel and empowering the steering committee to designate people who have to travel on assignment on behalf of the committee.
Senator Moore: So moved.
The Chair: Thank you, Senator Moore.
Is there discussion? All in favour?
Hon. Senators: Agreed.
The Chair: Carried.
The next agenda item is the designation of members travelling on committee business; essentially the designation of official business.
Senator Moore: I will move that one as well.
The Chair: Thank you, Senator Moore. I appreciate it.
Is there any discussion? All in favour?
Hon. Senators: Agreed.
The Chair: Carried. Thank you.
[Translation]
Travelling and living expenses of witnesses. It is normal to pay the expenses of witnesses who travel to Ottawa.
Senator Greene: I so move.
The Chair: All in favour?
Hon. Senators: Agreed.
The Chair: Motion carried.
Item number 12: communications. Moved by Senator Hervieux-Payette, if I understood correctly?
Senator Hervieux-Payette: Yes, that is correct. I so move.
The Chair: No comments? All in favour?
Hon. Senators: Agreed.
The Chair: Motion carried.
Next item: the time slot for regular meetings is the same as it was in the last session. Does anyone want to make that motion?
Senator Hervieux-Payette: I so move.
The Chair: Moved by Senator Hervieux-Payette. All in favour?
Hon. Senators: Yes.
The Chair: Motion carried.
Is there any other business?
Hon. Senators: No.
The Chair: I would like to raise one other point before the committee. Since we are all here, could the Subcommittee on Agenda and Procedure stay after the meeting to discuss the agenda?
Senator Hervieux-Payette: We had started discussing the issues we wanted to talk about.
The Chair: I agree.
Senator Hervieux-Payette: I suggest that the steering committee meet afterwards because, if there are a dozen topics to discuss, we will have to make some decisions.
We often hear that Canadians are getting into more and more debt, that the Governor of the Bank of Canada is worried, that associations, such as the Certified General Accountants Association of Canada, have just issued a report and that people are afraid the economic situation is getting worse.
Before looking into what we can do, we could ask some experts what the options are. We could then have meetings next week. There are people right here. The headquarters of the Accountants Association is here in Ottawa.
The Governor of the Bank of Canada does not necessarily have to come here. There are still a number of people who can come and explain the situation and provide us with facts. When we come back in September, we could look at the potential solutions to reduce the debt spiral and lift this pressure off. As a result, our economy would not be overly affected by debt if problems crop up at the international level. This cycle is always on the rise. I am sure that you are concerned about the situation too. The idea is to invite the Accountants Association so that they submit their report. We should also invite a representative from the Bank of Canada.
I have an editorial from Le Devoir in front of me. The journalist wrote a good article on this issue, and it has been a hot topic in the papers recently. The situation is very worrisome because it affects us all. The debts are with the banks.
[English]
The Chair: That is an interesting discussion. Practically speaking, clerk, are there any problems?
Mr. Thompson: The only issue I see is with timing as far as next week, as presently the committee does not have an order of reference, which we would require in order to hear witnesses.
The Chair: We do not have one, but could I not propose that general order of reference this afternoon?
Mr. Thompson: You certainly could. I have in fact prepared a draft notice of motion based on the standard order of reference, which I believe was the current state of the economy. If you are comfortable that that is broad enough to cover this issue, as soon as that is adopted by the Senate, then —
The Chair: I would like to hear comments from colleagues.
I am not speaking against this idea in any way; I think it is a very interesting suggestion, but I remind you that we do have something that we can go back to, which is financing of innovation on which we heard one witness.
I will open the floor to discussion.
Senator Oliver: I like the suggestion of Senator Hervieux-Payette. However, she said that we did not really have to call the governor. I think the governor is very important because all the things I have read indicate that the governor, who controls interest rates, says the big problem will be when our interest rates start going up. There are a number of Canadians who have open mortgages and so on. When the rates go up, they will have to pay more on their mortgages every month. The rates on their lines of credit will go up. That is his concern.
Since he is the one who will soon be starting to raise these rates, he might have some salient things to say to us on that. I would hope that, in addition to accountants and others, the governor or someone senior from the bank could come, because they are the ones who control the interest rates that will directly impact Canadians who are having these problems.
The Chair: Let us first decide whether we want to go ahead with this. It is a good point. I think Senator Hervieux- Payette was recognizing that it may not be possible to get the governor for next week.
Senator Hervieux-Payette: We will invite him.
The Chair: Would we be happy with the deputy?
Senator Greene: In my view, we should take our time a bit. Before we embark on new business and new activities, we should assess where we were earlier in the spring. We have some new members, and they should be brought up to speed. We should have a meeting to which we come prepared with ideas for carrying on. My sense is that we should slow it down a little bit.
The Chair: I have two questions. Would you be agreeable with me getting a general mandate, a standard order of reference?
Senator Greene: Yes.
The Chair: If, by chance, the clerk was able to convince the deputy governor or the governor to come next week, would you be happy to have them?
Senator Greene: I would always be happy to have them.
Senator Stewart Olsen: I would like some time to prepare. I am new and next week is way too early for me to meet and discuss things with this man. I do not know where we are going as a committee on this. I would be happy if steering would discuss this and come back to the whole committee with a recommendation.
The Chair: Senator Hervieux-Payette indicated that she would like other suggestions, too.
Senator Stewart Olsen: I would like that, and I would like us to decide the way in which we would like to move forward if we are lucky enough to get representation from there. It is just a little bit of a break, just to see where we are going.
The Chair: What would be your suggestion for next week? Would you like another meeting of the committee to discuss the way forward?
Senator Stewart Olsen: I think so. As a committee as a whole with all the members, I would like to hear a way forward.
Senator L. Smith: Mr. Chair, just from a sequential positioning, being a new member starting last February, it would be helpful in terms of setting expectations, setting a plan, making sure that we set priorities of what we want to look at. Coming from a business background, I know that sometimes it is hard when you jump into something. The point that Senator Hervieux-Payette has come up with is excellent in terms of debt, but it might be helpful for us to spend a day going through an exercise making sure. We started doing that with a group before the break and we came up with an innovation concept. My understanding was that when we restarted we would look at that. I am not saying that that has to be the number one priority, if we change it, because the debt situation obviously is something that is front and centre worldwide; second, it is supportive of all the policies we have tried to come across with our federal campaign and with the budget, in terms of living within your means. It can be a perfect topic, but it is important for us to set it up, just going through the groundwork and saying that these are the expectations, what are our potential priorities, agree on the priorities and then go from there. It seems like an organizational way to do it.
The Chair: Before turning to Senator Moore, I want to comment that we certainly can study whatever we decide we want to study and without regard to any institutions outside the House of Commons, but I would like to find out what they will be undertaking just as guidance for us, to take into consideration one way or the other. I do not know the answer to that.
Senator Moore: We did not have our usual spring session with the Governor of the Bank of Canada. We will not see him again in the usual schedule until October. I think it is incumbent upon us to try to get him in sooner. I would like to see him before us before we break for the summer.
The Chair: If it is the wish of the committee, we will certainly make the inquiry.
Senator Moore: He has been certainly sounding off.
The Chair: Would you take the deputy governor if the governor was not available?
Senator Moore: Certainly, I would take some person in authority from the bank. The Governor has been making statements now with regard to housing. He has been making comments about public debt for a while. He obviously sees trends. He is speaking in generalities, but we should have him before us because this is a key, key issue.
The Chair: He might give us some background.
Senator Oliver: I wanted to add to my earlier remarks, one of the things that this committee has looked at off and on over three years, and one of the concepts that relates to personal debt that the Minister of Finance, Mr. Flaherty, is extremely interested in, is something called financial literacy. He took a report from this committee so seriously that he actually set up a commission made up of the president of Sun Life and BMO Nesbitt and so on and some other senior Canadians to look at it. They have filed a report. The report was filed at the beginning of this year. It may well be that we would want to call them in to give an overview of some of their findings, because they have travelled all across Canada; they have talked to many different people about the concept of financial literacy and, indeed, at the heart of what Senator Hervieux-Payette is saying, if Canadians are going into debt, what steps are we as Canadians and the Canadian government taking to help make people more literate and have a greater understanding about finances and debt? Because our committee has made strong recommendations on it, and because the Minister of Finance accepted those recommendations and set up the commission, it would seem logical that we would follow up by having them come in and speak to that report.
Senator Hervieux-Payette: First, you have to understand that for me this was not a study. This was giving us a background where we should have our study. These people would be coming and giving us facts and we could then decide our direction and to prioritize the subject matter we would like to study.
You have to understand that there is the critical situation of Greece. There is the critical situation with the Arab world. Between now and September, things can happen that will have an effect. We should make the best use of these two days. I understand that we will have to have a plan for the session starting in September. We will have time to elaborate and to decide which witnesses and so on we will hear from, but this was just giving us an overview of where we should be going, first, and then give us some time to reflect on it, to have it on the record, to look at it and see what would the priority be for our business plan for the fall.
For me, it was not to formulate anything. They have done the research. They have the proper researchers, not that we do not have good ones, but they have an army of people who have worked on these questions. The report is just out of the press; it was issued two days ago.
The Chair: What is the name of the group?
Senator Hervieux-Payette: L'Association des comptables généraux accrédités du Canada, CGA-Canada.
They have done an important study and are sharing it. Having the people who did it giving us more or less where the weaknesses are in our system and what we should address in the fall would give us at least the basic background study for us to plan for our next session.
It was not for me to establish anything. It was just to make the best use of the two days that we have before the end of the session.
The Chair: What do people think on that basis? Senator Hervieux-Payette has clarified that she is not trying to set an agenda but she thinks we should make use of the two days.
Senator Stewart Olsen: That is a good explanation. I thank you for that. I am not sure we can set an agenda for the fall. Things are changing so rapidly, we will have to take into account what has happened over the summer. I hear what you say and it would be an information process only that we could use, perhaps, but we should count on needing more information in the fall when we come back because I think things will have changed.
The Chair: I agree with you on that. Who knows, as Senator Hervieux-Payette has said, too, what will happen during the summer? That is what the steering committee is for, but probably we would want to have a meeting of the full committee as soon as we come back and set our agenda.
In the meantime, do you want to take the chance to try to get the Governor or the Deputy Governor, and/or the Association des comptables?
Senator Stewart Olsen: I bow to the majority because I am new.
The Chair: Is anyone radically opposed? Let us try that now. What happens if we do not get any of them?
Senator Oliver: We would like to hear from you then, Mr. Chair.
The Chair: I have great confidence in the clerk.
If we do not, we will meet. We will discuss other matters.
Senator Hervieux-Payette: We have nothing to lose. As I say, it is not asking people from Vancouver to come to Ottawa for two hours. They are next door. I am sure there is more than one person who is knowledgeable about the report of the accountants. It is fairly comprehensive. It is the same thing with the Bank of Canada. It is a trend. We are not talking about something new. It is not something that will disappear by some miracle by September. I think the Governor has made that statement in a speech over and over again. He made it in Vancouver yesterday. There are some basic things we may find and subject matter that we can study in the fall that could consolidate and prevent, over and above the literacy, because literacy is not something that happens overnight. Maybe there are other measures that could be taken to prevent a disaster like we see in the United States. That is the purpose of my proposal.
The Chair: Indirectly, as I understand you, you are saying maybe the Governor could help us, absent some great surprise, set our agenda?
Senator Hervieux-Payette: Yes.
The Chair: He might be reluctant. He might say, ``I like to prepare for these hearings. Normally I get notice well in advance. I do not want to come and have an irregular hearing.''
Senator Moore: That is true, Mr. Chair, but I do not think the governor or any of his senior staff would be making comments or giving speeches, as they have been doing lately, particularly the governor, without having numbers to back it up. He is seeing stuff that has got him very concerned. That is the first time I remember the governor, since I have been on this committee, speaking out about housing. I have heard about debt, but not so much in the detail that he is going at it now. He obviously has things in front of him that I think we should know about.
The Chair: I guess you are right. He will probably have information at his fingertips. Let us try.
Senator Oliver: We are in the hands of the steering committee. We are blessed to have a great steering committee on this committee. They set the agenda and we will be in their hands.
The Chair: You are for it, then.
Are there any other matters to come before the committee?
Senator Oliver: I move we adjourn.
(The committee adjourned.)