Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue 1 - Evidence of October 23, 2002
OTTAWA, Wednesday, October 23, 2002
The Standing Senate Committee on Banking, Trade and Commerce met this day at 5:30 p.m., pursuant to rule 88 of the Rules of the Senate, to organize the activities of the committee.
[English]
Mr. Denis Robert, Clerk of the Committee: Honourable senators, we have a quorum.
As clerk of your committee, it is my duty to preside over the election of the chair. I am ready to receive motions to that effect.
Senator Tkachuk: I move the nomination of Senator E. Leo Kolber.
Mr. Robert: Are there any other motions? It is moved by the Honourable Senator Tkachuk that the Honourable Senator Kolber be chair of this committee. Is it your pleasure, honourable senators, to adopt the motion?
Hon. Senators: Agreed.
Mr. Robert: I declare the motion carried.
In accordance with rule 88, the Honourable Senator Kolber is elected chair of this committee and I invite Senator Kolber to the chair.
Senator E. Leo Kolber (Chairman) in the Chair.
The Chairman: I will take nominations for deputy chair.
Senator Setlakwe: I should like to nominate Senator Tkachuk as deputy chair.
The Chairman: All those in favour?
Senator Prud'homme: Could we have a roll call, please?
The Chairman: Sure. I do not even know what that means. Senator Fraser, Senator Setlakwe, Senator Fernand Robichaud, P.C., Senator De Bané, P.C..
Senator Prud'homme: No, I want it on the record.
Mr. Robert: He wants it on the record, so I call the names out. Senator Kolber.
The Chairman: Present.
Mr. Robert: Senator Fraser.
Senator Fraser: Present.
Mr. Robert: Senator Setlakwe.
Senator Setlakwe: Present.
Mr. Robert: Senator Robichaud.
Senator Robichaud: Present.
Mr. Robert: Senator De Bané.
Senator De Bané: Present.
Mr. Robert: Senator Prud'homme.
Senator Prud'homme: Present.
Mr. Robert: Senator Tkachuk.
Senator Tkachuk: Present.
The Chairman: Next is the Subcommittee on Agenda and Procedure, in other words, the steering committee. If you do not mind, I would suggest that the steering committee be myself, Senator Kroft and Senator Tkachuk.
Senator Setlakwe: I so move.
The Chairman: Moved by Senator Setlakwe that the steering committee will be Senator Kolber, Senator Kroft and Senator Tkachuk.
The Chairman: The roll call will now include Senator Fitzpatrick.
Senator Fitzpatrick: I was locked out.
Senator Prud'homme: Excuse me, Mr. Chairman. It is my first meeting. I should like to start on a good footing. What is the motion you are asking us at the moment? What is the motion now?
The Chairman: The one we just passed is for the steering committee. It is called the Subcommittee on Agenda and Procedure.
Senator Prud'homme: And you, of course.
The Chairman: Senator Setlakwe moved that the steering committee be myself, Senator Kroft and Senator Tkachuk. It will be the chair, deputy chair and one other member of the committee.
Hon. Senators: Agreed.
The Chairman: Next, I will accept a motion to print the committee's proceedings.
Senator Tkachuk: I so move.
The Chairman: It was moved by Honourable Senator Tkachuk —
That the committee print its proceedings and to allow the committee to set the number to meet the demand.
Is it agreed, honourable senators?
Hon. Senators: Agreed.
The Chairman: Item No. 5 is authorization to hold meetings and to print evidence when a quorum is not present. Someone move that, please.
Senator Prud'homme: What is the quorum?
The Chairman: Four.
Senator Prud'homme: Thank you.
The Chairman: It is moved by the Honourable Senator Fitzpatrick:
That, pursuant to rule 89, the Chair be authorized to hold meetings, to receive and authorize the printing of the evidence when a quorum is not present, provided that a member of the committee from both the government and the opposition be present.
There must be one from each side as a minimum.
I would like a motion for the financial report.
Senator Tkachuk: So moved, Mr. Chairman.
The Chairman: It is moved by the Honourable Senator Tkachuk:
That, pursuant to Rule 104, the Chair be authorized to report expenses incurred by the committee during the last session.
Is it your pleasure, honourable senators, to adopt the motion?
Hon. Senators: Agreed.
The Chairman: The seventh motion is with regard to the research staff.
Senator Tkachuk: I so move, Mr. Chairman.
The Chairman: It is moved by the Honourable Senator Tkachuk:
That the committee ask the Library of Parliament to assign research officers to the committee;
That the Chair be authorized to seek authority from the Senate to engage the services of such counsel and technical, clerical, and other personnel as may be necessary for the purpose of the committee's examination and consideration of such bills, subject-matters of bills, and estimates as are referred to it;
That the Subcommittee on Agenda and Procedure be authorized to retain the services of such experts as may be required by the work of the committee; and
That the Chair, on behalf of the committee, direct the research staff in the preparation of studies, analyses, summaries, and draft reports.
Is it agreed, honourable senators?
Hon. Senators: Agreed.
The Chairman: The next motion is No. 8, which has to do with authority to commit funds and certify accounts.
Senator Fitzpatrick: I so move, Mr. Chairman.
The Chairman: It is moved by the Honourable Senator Fitzpatrick:
That, pursuant to section 32 of the Financial Administration Act, authority to commit funds be conferred individually on the Chair, the Deputy Chair, and the Clerk of the Committee; and
That, pursuant to section 34 of the Financial Administration Act, and Guideline 3:05 of Appendix II of the Rules of the Senate, authority for certifying accounts payable by the Committee be conferred individually on the Chair, the Deputy Chair and the Clerk of the Committee.
Is it agreed, honourable senators?
Hon. Senators: Agreed.
The Chairman: The ninth motion is one for travel.
Senator Setlakwe: I so move the motion, Mr. Chairman.
The Chairman: It is moved by the Honourable Senator Setlakwe:
That the committee empower the Subcommittee on Agenda and Procedure to delegate, as required, one or more members of the committee and/or such staff as may be necessary to travel on assignment on behalf of the committee.
Is it agreed, honourable senators?
Hon. Senators: Agreed.
The Chairman: The next motion concerns the attendance policy. Senator Kelleher, would you like to move that motion?
Senator Kelleher: I so move, Mr. Chairman.
The Chairman: It is moved by Senator Kelleher:
That the Subcommittee on Agenda and Procedure be authorized to determine whether any member of the committee is on ``official business'' for the purposes of paragraph 8(3)(a) of the Senators Attendance Policy, published in the Journals of the Senate on Wednesday, June 3, 1998; and
consider any member of the committee to be on ``official business'' if that member is: (a) attending a function, event or meeting related to the work of the committee; or (b) making a presentation related to the work of the committee.
Is it agreed, honourable senators?
Hon. Senators: Agreed.
The Chairman: The next motion concerns travelling and living expenses of witnesses.
Senator De Bané: Mr. Chairman, concerning the motion about travelling expenses, et cetera, the French translation is not good. There is a mistake.
On line 5, it states, ``...de voyages et d'hébergement à un témoin d'un même organisme...''. What they want to say there is that they will pay the expenses for only one witness from an organization that testifies before your committee. Exceptionally, you might pay for two witnesses from one organization, but the rule is one.
The way it is written is very awkward in French.
The Chairman: What do you suggest?
Senator Prud'homme: The suggestion would be to take the English and retranslate it accordingly.
The Chairman: Let us take the English and have it retranslated, which is a good suggestion.
It is moved by the Honourable Senator Prud'homme:
That, pursuant to the Senate guidelines for witnesses' expenses the committee may reimburse reasonable travelling and living expenses for one witness from any one organization and payment will take place upon application, but that the Chair be authorized to approve expenses for a second witness should there be exceptional circumstances.
We order the clerk to see that is translated exactly as is.
Is it agreed, honourable senators?
Hon. Senators: Agreed.
The Chairman: The next motion is for electronic media coverage of public meetings. Senator De Bané, would you move that?
Senator De Bané: I so move, Mr. Chairman.
The Chairman: The Honourable Senator De Bané moved:
That the Chair be authorized to seek permission from the Senate to permit coverage by electronic media of its public proceedings with the least possible disruption of its hearings; and
That the Subcommittee on Agenda and Procedure be empowered to allow such coverage at its discretion.
Is it agreed?
Senator Prud'homme: For the future, why is it necessary for us to include the words ``with the least possible disruption''? Is that something that exists in other committees?
The Chairman: Yes. It is a standard clause.
Is it agreed, honourable senators?
Hon. Senators: Agreed.
The Chairman: The time slot for regular meetings is room 505, Victoria Building on Wednesday at 3:30 p.m. and Thursday at 10:45 a.m.
Senator Tkachuk: Should we clarify that with ``when the Senate rises'' because sometimes we are there after 3:30?
The Chairman: Legally, we cannot meet when the Senate has not risen. You are quite right in pointing that out.
Tomorrow at 11 a.m., honourable senators, we will have Bill S-2 presented to us. It is the taxation treaty with a number of countries, including Moldova, which the Conservatives, I think with some justification, are taking exception to because of its terrible record on human rights. We have been through this before.
We have asked officials from the Department of Foreign Affairs and International Trade to be present as well as officials from the Department of Finance. Their answer will be that, if you do not help these places or invest in them the situation becomes worse for the people. I do not know what is right or wrong. Honourable senators will have to decide for themselves.
At 12:30 tomorrow we will have Mr. Bevilacqua, the Secretary of State for International Financial Institutions. He will spend one hour with us telling us what the government's position is on the ``Enronitis'' situation, which we have studied and will now get into full gear to study again. With your knowledge, Senator Tkachuk and all honourable senators, we held quite a few consultations with the Department of Finance whose officials are cooperating with us to study this whole matter. They are helping us with their vast resources because ours are limited. It will be very difficult to find answers to this problem.
Obviously, the business community wants no legislation. As legislators — and I am only giving honourable senators my opinion — I believe that the government must send out some signals to indicate that we worry about the investor, that we care and that we will do something. What that something is I cannot tell you. I do not know. That will be for this committee to consider. We will have extensive hearings from now until the end of the year.
We will talk about this as the weeks go on. Originally, I wanted to get out an interim report. However, because we were delayed by all kinds of Senate shenanigans, I do not know if we will be able to do that. Perhaps we should not rush it, but honourable senators will have to make that decision.
In any event, we will study the matter. There has been a significant amount of work done by Finance on it. Now that we have a committee, we will be distributing some of that work.
There is a good in-depth report of how we compare to Sarbanes-Oxley, which is the U.S. Congress' first big crack at trying to solve this messy problem. We will have some in camera meetings to discuss this subject at more length, but just to brief honourable senators, we are between a rock and a hard place in trying to legislate integrity. I am not precisely sure how to do that. However, we will attack the matter. We will listen to extensive witnesses and we will draft a report. That is the first subject.
Second, we will be called upon to take a fresh look at one of the criteria of bank mergers. We will be receiving a letter from the minister. When I receive it — and that should be any day — the letter will be made public. This is not a contentious item. It is simply to try to clarify some of the wording in the criteria to allow a bank merger. The criteria that must be clarified is what is in the public's interest. It is an interesting idea.
When we receive that documentation, we will hear from the proper witnesses and determine what it is all about.
Next we have to review the Bankruptcy Bill. Then there is the bankruptcy and insolvency matter. I have been receiving extensive lobbying from various bankruptcy experts. It is an okay act, they say, but it is not really what it should be. Then there is the Bankruptcy and Insolvency Act; there is the Creditors Act. There are a series of acts that some people say should be put together. We will cross that bridge when we come to it. I just wanted honourable senators to know that, if anyone wants to talk to you about it, please know it is on our agenda.
There is also Senator Setlakwe's favourite subject, the Business Development Corporation, and why it does not give more loans to small businesses.
Senator Kelleher: I have two items, Mr. Chairman.
The Chairman: There is the World Trade Organization.
Senator Kelleher: Financial services.
The Chairman: I promise you we will return to that. However, we are so overloaded at this minute. However, we will attack that matter in the new year.
Senator Kelleher: There is one other item that I wish to raise, which is really a burning issue with me. Your staff is well aware of it. It is not their fault. I was never very happy when the legislation was going through establishing FinTRAC. It was, to say the least, contentious. I, for one, am very suspicious —
The Chairman: You mean the ``money laundering act.''
Senator Kelleher: — of the intrusive powers they were given. Some of those that we complained about have been struck down by the Supreme Court of Canada.
The Chairman: What would you like us to do?
Senator Kelleher: I will tell you what is really bothering me. Near the end of our session, they were given an additional $20 million. I have asked and I have been totally stonewalled trying to find out what this additional $20 million is for. What will they use that allotment for? I do not trust them. I suspect, but I have no proof, that they will be enlarging their mandate without proper approval. They will be using this money for various things.
The Chairman: I have two answers for you. First, Mr. Campbell, my executive assistant, has met with Mr. Bevilacqua's people and asked the precise question you are asking. We will have an answer in two weeks. That is the first point.
Second, if you are unhappy with the answer, as you probably will be, we will bring the officials back to have a hearing on the matter.
Senator Kelleher: I am unhappy at the moment that they will not give me an answer.
Senator Prud'homme: You are suspicious.
The Chairman: Let us get the answer, Senator Kelleher, and if you think the answer is adequate or appropriate, fine. If not, we will schedule a hearing with the proper officials.
Senator Kelleher: That would be great.
The Chairman: In the meantime, it would be helpful if you would send me a letter outlining what you said before. I would like to have it on the record so at least I can say I have been asked about what is happening.
Senator Kelleher: I think it was $20 million.
The Chairman: Whatever.
Senator Tkachuk: I am not sure if the chair meant this inadvertently or advertently, but on the question of Enron, as a parliamentarian, I do not know what the government response is. You said it is important that we have a government response. I just wish to clarify that in this committee, this is Parliament's response. I really do not care what the government does. If the government has a response, it should produce it in a bill and bring it before the House of Commons. If it wishes us to examine these issues as parliamentarians and make recommendations to Parliament, then they can proceed and introduce legislation.
The Chairman: That is precisely what is happening.
Senator Tkachuk: That would be good, as long as they are listening to parliamentarians.
The Chairman: Before we go further, there is one last item to be dealt with before we have a discussion in camera.
The last item is the budget for legislation.
It is moved by the Honourable Senator Setlakwe:
That, in relation to possible legislation that may be referred to it and in accordance with the Procedural Guidelines for the Financial Operation of Senate Committees, the committee authorize the Chair to seek authorization to incur expenses not exceeding $10,000.
Mr. Robert: It is emergency funding.
The Chairman: It is ``emergency funding,'' whatever that means. That means we should not go without sandwiches tomorrow.
Is it agreed, honourable senators?
Hon. Senators: Agreed.
The Chairman: Next is budget — special study.
It is moved by the Honourable Senator Setlakwe:
That, in relation to its special study of the present state of Canada's financial system and in accordance with the Procedural Guidelines for the Financial Operation of Senate Committees, the committee authorize the Chair to seek authorization to incur expenses not exceeding $10,000.
Are all in favour?
Hon. Senators: Agreed.
The Chairman: I will now have the motion for adjournment. Are all in favour?
Hon. Senators: Agreed.
The committee continued in camera.