FINA Committee Meeting

Meeting No. 190

Thursday, May 13, 1999

The Standing Committee on Finance met at 9:16 a.m. this day, in Room 371, West Block, the Chair, Maurizio Bevilacqua, presiding.

Members of the Committee present: Carolyn Bennett, Maurizio Bevilacqua, Roger Gallaway, Sophia Leung, Yvan Loubier, Gary Pillitteri and Karen Redman.

Acting Members present: John Richardson for Nick Discepola, Rick Limoges for Paul Szabo, Réginald Bélair for Tony Valeri, Gerry Ritz for Richard Harris.

In attendance: From the Library of Parliament: Marion Wrobel, Senior Analyst. From Committees and Legislative Services: Marc Toupin.

Witnesses: From the Department of Finance: Charles O'Hara, Chief, Policy Development, Financial Sector Division; Eleanor Ryan, Project Leader, Policy Development, Financial Sector Division; Rhoda Attwood, General Counsel. From the Office of the Superintendent of Financial Institutions Canada: Brian Long, Manager, Precedents & Guideline Support, Legislation & Precedents Division.

In accordance with the Order of Reference of the House of Commons of Tuesday, April 13, 1999, the Committee resumed its consideration of Bill C-67, An Act to amend the Bank Act, the Winding-up and Restructuring Act and other Acts relating to financial institutions and to make consequential amendments to other Acts.

The Committee proceeded to Clause-by-Clause consideration of the Bill.

Clauses 2 to 21 carried severally, on division.

On New Clause 21.1

Carolyn Bennet moved, - That Bill C-67 be amended by adding after line 46 on page 7 the following:

21.1 Subsection 413(5) of the Act, as enacted by section 43 of An Act to amend certain laws relating to financial institutions, being chapter 15 of the Statutes of Canada, 1997, is replaced by the following:

(5) For the purpose of subsection (3), "deposit" has the meaning that would be given to it by the schedule to the Canada Deposit Insurance Corporation Act for the purposes of deposit insurance if that schedule were read without reference to subsections 2(2), (5) and (6) of that schedule, but does not include prescribed deposits

(6) The Governor in Council may make regulations

(a) prescribing the deposits referred to in subsection (5); and

(b) prescribing terms and conditions with respect to the acceptance of those deposits."

The question being put on the amendment, it was agreed to, on division.

The question being put on New clause 21.1, it was agreed to, on division.

Clauses 22 to 28 carried, on division.

Carolyn Bennett moved, - That Bill C-67, in Clause 29, be amended by

(a) replacing lines 27 to 30 on page 11 with the following:

"29. (1) Subsection 513(1) of the Act is replaced by the following:

513. (1) A foreign bank shall not guaran-"

(b) adding the following after line 3 on page 12:

"(2) Section 513 of the Act is amended by adding the following after subsection (2):

(3) This section does not apply in respect of the business in Canada of an authorized foreign bank."

The question being put on the amendment, it was agreed to, on division.

Clause 29, as amended, carried, on division.

Carolyn Bennett moved, - That Bill C-67, in Clause 30, be amended by

(a) replacing line 6 on page 12 with the following:

518. (1) Subject to subsection (3) and section 521, where shares in a foreign bank"

(b) replacing line 26 on page 12 with the following:

"(1.1) Subject to subsection (3) and section 521, an authorized foreign bank that is not"

(c) replacing line 40 on page 12 with the following:

"(1.2) Subject to subsection (3) and section 521, an authorized foreign bank that is"

(d) deleting lines 28 to 31 on page 14

(e) replacing lines 35 to 38 on page 14 with the following:

"(3) A foreign bank to which subsection (1), (1.1) or (1.2) applies, or any entity associated with it, may acquire control of, or acquire or hold a substantial investment in, a Canadian entity if"

The question being put on the amendment, it was agreed to, on division.

Clause 30, as amended carried, on division.

Clauses 31 and 32 carried severally.

Carolyn Bennett moved, - That Clause 33, be amended by replacing, in the French version, line 19 on page 17 with the following:

"à l'annexe II — de la banque étrangère."

The question being put on the amendment, it was agreed to, on division.

Clause 33, as amended carried, on division.

Clause 34 carried.

Carolyn Bennett moved, - That Clause 35, be amended :

(a) by replacing, in the French version, lines 18 to 20 on page 32 with the following:

"540. (1) En cas d'application du paragraphe 524(2), la banque étrangère autorisée ne peut, dans le cadre de"

b) by replacing, in the French version, lines 30 to 32 on page 32 with the following:

"(2) En cas d'application du paragraphe 524(2), la banque étrangère autorisée doit, de la façon prévue par"

After debate the question being put on the amendment, it was agreed to, on division.

Carolyn Bennett moved, - That Clause 35, be amended by replacing lines 7 to 20 on page 33 with the following:

"authorized foreign bank may

(a) accept deposit liabilities or otherwise borrow money from

(i) a financial institution other than a foreign bank, or

(ii) a foreign bank that meets the conditions described in subparagraphs 521(1.07)(a)(i) and (ii),

by means of financial instruments that cannot be subsequently sold or traded; or

(b) accept deposit liabilities or otherwise borrow money, from prescribed classes of entities referred to in subparagraph (a)(i) or (ii), by means of financial instruments that can be sold to or traded with those classes of entities, in accordance with regulations made pursuant to subsection (6).

(5) Paragraph 1(c) does not apply in respect of

(a) securities or bills of exchange that are sold to or traded with any entity referred to in subparagraph (4)(a)(i) or (ii) and that cannot be subsequently sold or traded; or

(b) securities or bills of exchange that can be sold to or traded with prescribed classes of entities referred to in subparagraph (4)(a)(i) or (ii), in accordance with regulations made pursuant to subsection (6).

(6) The Governor in Council may make regulations

(a) prescribing the class, type or amount of deposit liabilities or borrowings referred to in paragraph (4)(b);

(b) prescribing the class, type or amount of securities or bills of exchange referred to in paragraph (5)(b);

(c) prescribing the classes of entities referred to in paragraph (4)(b) or (5)(b);

(d) prescribing the terms and conditions respecting any sale or trade of financial instruments, securities or bills of exchange; and

(e) respecting such other matters or things as are necessary to carry out the purposes of this section.

The question being put on the amendment, it was agreed to, on division.

Carolyn Bennett moved, - That Clause 35, be amended by replacing line 21 on page 35 with the following:

"2(2),(5) and (6) of that schedule, but does not include prescribed deposits."

The question being put on the amendment, it was agreed to, on division.

Carolyn Bennett moved, - That Clause 35, be amended by adding after line 2 on page 36 the following:

"(a.1) prescribing the deposits referred to in subsection (3) and the terms and conditions with respect to the acceptance of those deposits;"

The question being put on the amendment, it was agreed to, on division.

Carolyn Bennett moved, - That Clause 35, be amended by replacing line 14 on page 61 with the following:

"the Superintendent within five months after the"

The question being put on the amendment, it was agreed to, on division.

Clause 35, as amended, carried, on division.

Clauses 36 to 100 carried, on division.

Carolyn Bennett moved, - That Clause 101, be amended by:

(a) replacing line 20 on page 111 with the following:

"26.01 (1) Subject to subsections (2) and 3"

(b) adding the following after line 33:

"(3) For the purposes of paragraph 26.03(1)(b) and subsection 26.03(2), "deposit" has the meaning that would be given to it by the schedule, for the purposes of deposit insurance, if the schedule were read without reference to subsections 2(2), (5) and (6) of the schedule, but does not include deposits prescribed by the by-laws.

(4) The Board may make by-laws

(a) prescribing the deposits referred to in subsection (3); and

(b) prescribing terms and conditions with respect to the acceptance of those deposits."

The question being put on the amendment, it was agreed to, on division.

Clause 101, as amended carried.

Clauses 102 to 107 carried severally, on division.

Carolyn Bennett moved, - That Clause 108, be amended by replacing, in the English version, line 37 on page 113 with the following:

"is a deposit. The moneys are considered to be"

The question being put on the amendment, it was agreed to.

Clause 108, as amended, carried.

Clauses 109 to 127 carried severally on division.

After debate the question being put on Clause 128, it was agreed to on the following division:

YEAS

NAYS

Clauses 129 to 180 carried severally on division.

Clause 1 carried.

The Title carried.

The Bill as amended carried.

ORDERED - That the Chair report Bill C-67 with amendments to the House as the Eighteenth Report of the Committee.

ORDERED - That Bill C-67 be reprinted as a working copy for the use of the House at Report Stage.

At 9:30 a.m., the Committee adjourned to the call of the Chair.

Miriam Burke

Committee Clerk