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S'enregistrer au Flux RSS Le Sénat du Canada

Post under ‘Financial crisis’ tag

Loss at JPMorgan: the conservatives are still opposed to reforming the financial system

16 May 2021 at 20h54

Hon. Céline Hervieux-Payette: Honourable senators, my question is for the Leader of the Government in the Senate. You have certainly heard the recent news of JPMorgan posting over $2 billion in losses in two weeks after speculating on credit derivatives.

After that debacle, U.S. President Barack Obama said that this incident only underscores why it was so important to reform the rules that apply to Wall Street and all financial sectors, and why those rules need to be fully enforced, not just on an ad hoc basis.

A few weeks ago, I asked a question about the fact that Canadian banks had received secret loans totalling billions of dollars in order to prevent some of them from going bankrupt at the beginning of the crisis in 2008.

When will the Prime Minister work with President Obama — for once, I believe that we, on this side, agree that they should work together — in order to regulate the financial system and prohibit Canadian banks from making any speculative investments, considering that the banks are funded for the most part by Canadians’ pension funds? (more…)

“They may think that they are tough on crime, but they are definitely soft on the economy”

16 February 2021 at 16h04

Hon. Céline Hervieux-Payette: Honourable senators, I came across an article in the Huffington Post stating that Moody’s and Fitch both questioned the need for Canada’s austerity measures, and I quote:

Steven Hess, the lead Canada analyst for Moody’s, told the Wall Street Journal that there is a “risk to growth” if the government moves too quickly with austerity measures designed to return the country to balanced budgets.

With a budget deficit that amounts to about two per cent of GDP, there is “no rush” for Canada to address the problem, Hess said.

“You don’t have to swallow an extremely bitter pill if you are not sick,” Fitch Ratings analyst Shelly Shetty told the Journal. She suggested any acceleration of spending cuts to beat the 2016 deadline was “not required.”

The government has often sung praises of these two rating agencies when they evaluated Canada’s finances. They have now proven that the government is too incompetent to deal with the economy. They may think that they are tough on crime, but they are definitely soft on the economy. When will the government take concrete measures aimed at strengthening the economy instead of sending us down the path of Southern European countries? (more…)

Question about the Conservative Government’s mismanagement of the economy

2 February 2021 at 14h52

Hon. Céline Hervieux-Payette: Honourable senators, my question is for the Leader of the Government in the Senate. Affecting humility, the Prime Minister told the nations of the world that Canada is a model of good management, but now Canadian economists are challenging his model.

Recently, two Bank of Montreal economists observed a contraction in the Canadian economy and suggested that the latest round of budget cuts could harm our faltering economy. Also, the Canadian Centre for Policy Alternatives estimated that 60,000 jobs could be lost because of the cuts, with the hardest-hit sectors being reserve housing, First Nations health care, support for low-income families and unemployed workers, and elder care. (more…)

Harper’s ideology reform: neither desired nor desirable!

18 May 2021 at 13h11

Question period

Finance: National Securities regulation 

Hon. Céline Hervieux-Payette: Honourable senators, my question is for the Leader of the Government in the Senate. As she surely knows, the Fédération des chambres de commerce du Québec and some large Quebec companies, including Cascades, Quebecor, Jean Coutu, Industriel Alliance and many more, oppose centralizing the securities commissions. There is no evidence to suggest that centralization would be either relevant or effective when it comes to preventing the moral and financial crisis we are experiencing.

I want to emphasize that the OECD has ranked Canada second in the world with respect to securities regulation.

And, as I am sure honourable senators know, neither the single American securities commission nor the single British securities commission managed to protect investors; both failed to see the crisis coming.

Despite these facts, the Prime Minister is stubbornly going ahead with his plan to create a single commission even though it is neither sensible nor in the interests of the provinces, including Quebec, which want nothing to do with it. In light of growing opposition on the part of Quebec business leaders, can the minister tell us when her government, specifically her Prime Minister, will reconsider this proposal, which is neither desired nor desirable, thereby saving the $250 million already set aside for that purpose in the budget?


Hon. Marjory LeBreton (Leader of the Government): Honourable senators, Canada is the only industrialized country without a national securities regulator. Canada will be participating in G8 and G20 meetings. There has been and will continue to be a call for more financial regulations and international coordination. With these international pressures on us, we continue to be questioned about our fragmented system at home when we are dealing with our international partners.

As the honourable senator is aware, and as has been stated many times, this is a voluntary initiative. A clear majority of the provinces and territories are committed to or are open to working towards a single securities regulator. This is a voluntary initiative, and I am aware of some of the objections to it in the Province of Quebec. However, some industries and some people in Quebec are able to see the virtue of a single securities regulator.

This is a voluntary effort. If the Province of Quebec decides that it does not want to participate, that should not impede the desires of other provinces that wish to have a single securities regulator.

Senator Hervieux-Payette: Honourable senators, the leader is arguing that we are the only country without a national organization. I must remind her that the Prime Minister is travelling around the world now telling people we have a different law, that is why we are different and they are all having problems. Either we go along with the rest and go down the drain, or we have our own rules. Our system has prevailed.

When will the leader’s government table a study that will demonstrate, beyond any reasonable doubt, that we need that regulator and it is not for political purposes?

Senator LeBreton: Honourable senators, while travelling around the world representing us so very well, the Prime Minister and the Minister of Finance have discussed the notion of the global bank tax. Both have said that they do not believe Canada should be punished with this tax. The Prime Minister pointed out that Canada has handled it finances very well and did not have any bank failures, nor did the Canadian government become involved in any bailouts. The Prime Minister stated that Canada should not be punished for all of its good work. Honourable senators, with regard to when our government will table its intentions, the honourable senator knows that the government is seeking an opinion from the Supreme Court of Canada to provide legal certainty on Parliament’s authority to establish such a common securities regulator. Once that process is complete, we will table the plan.

Canadian Mortgage Crisis?

21 April 2021 at 09h59

Yesterday, I questioned the Leader of the Government in the Senate about the looming mortgage crisis in Canada. Please find attached the transcript of my questions and her answers.


Hon. Céline Hervieux-Payette: Honourable senators, my question is for the Leader of the Government in the Senate. Canadians’ ratio of debt to net income now sits at approximately 146 per cent. This figure clearly indicates that we are headed towards a financial crisis that could equal the 2008 crisis in the U.S.

New mortgage rules announced by the Minister of Finance, Jim Flaherty, went into effect yesterday in order to reduce the number of Canadians tempted by low interest rates and rising housing prices and who commit to a mortgage that they may no longer have the means to pay should interest rates increase.

The Conservative government has attempted on a number of occasions to persuade the Canadian public, wrongly, that the housing bubble was not about to burst and has made no tangible efforts to prevent Canadians from going into debt in such a volatile area. What additional measures has this government taken to force financial institutions to exercise more caution when providing mortgages guaranteed by the government?



Hon. Marjory LeBreton (Leader of the Government): The honourable senator underscored in her question the problem that the government acknowledged. Changes were made to avoid a situation like that which occurred in the United States with regard to the mortgage market and problems created by people taking on mortgages they could not afford, thereby starting the whole financial meltdown.

The government has taken a number of measures to help consumers, as the honourable senator knows. These include protecting consumers in regard to debit and credit cards.

There are many suggestions as to how government can encourage banks and consumers to be more fiscally responsible. However, we live in a free economy, honourable senators. The government has taken measures in the banking and mortgage industries over the last two years, culminating in the changes that came into effect yesterday.

Based on reports I have seen, experts do not believe Canada is yet in a position — and hopefully never will be, as was the case in the United States — where people are so overextended that they cannot afford to pay their bills to keep themselves in the homes they have purchased.

Senator Hervieux-Payette: Honourable senators, I wish to salute our colleague, Senator Pierrette Ringuette, for the work she has done on credit cards. I am happy the minister recognized this work and made some changes. It is a good step in the right direction.

However, in his 51-page report, Alexandre Pestov, of the Schulich School of Business, said:

According to the CMHC financial statements, the corporation has only $8 billion equity backing $200 billion in assets. Once defaults rise, the Canadian government will have no choice, but to bail out CMHC. The scale of bailout will likely dwarf all other financial emergency responses done by the Canadian government in the history of Canada. Higher national debt, increased taxes and reduced social services will be the direct result of the Harper government’s intervention to maintain an illusion of the Canadian housing market health.

What steps will this government take to prevent CMHC from the need to be bailed out with the hard-earned money of Canadian taxpayers once mortgage rates start to increase and Canadians default on their mortgage payments?

Senator LeBreton: The honourable senator is reading the opinion of one person that is not shared by others. She is running around like Henny Penny crying that the sky is falling. Other experts believe that, although there is concern, Canada is in no way in the same position as was the United States. The Department of Finance Canada and the minister will closely monitor the situation.

To go as far as to say it will be necessary to bail out CMHC is the opinion of one particular individual quoted by the honourable senator. I will refer the statement to the Ministry of Finance and ask if they wish to comment on it. I will be happy to table their reply as a delayed answer.



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