The Next Battleground

My topic in this space will focus on the revision of the Bank Act, and the current national political climate.

At the time of writing (March 2007), Bill C-37 is going through the Senate. It has passed the House of Commons, and is expected to pass the Senate within a few weeks. Now that an election is not on the short-order radar, the bill should pass by the deadline date of Apr. 24, 2007.

Many people have asked why the bill makes no mention of greater powers for banks into insurance. I believe that the answer is a simple one. Brokers have over the past few years invested a lot of time talking with their MPs and explained to them the importance for consumers and for communities, large and small, to maintain restrictions from having five players swallow up and dominate yet another pillar of financial services in Canada.

It is thanks to this effort by brokers that a loud message was sent to legislators on this issue. However, there has been, and still is, a feeling among some decision makers in Ottawa that lifting restrictions will eventually happen, and that it is just a question of time.

What does this mean for brokers and our industry?

This brings me to my second topic: the current political climate and how insurance brokers can shape it going forward.

Canada is at a crossroads in terms of the financial services industry. The trend over the last number of years has been towards greater consolidation and amalgamation. “One-stop shopping” is the overwhelming trend in the industrialized world. These trends will eventually make their way to Canada, and it will be up to our legislators to decide on its breadth and scope.

CROSS-PILLAR MERGERS

Bank mergers, and cross-pillar mergers have not been on the radar politically since the late ’90s. Banks have been left hanging on this topic; in the interim, they keep insisting that in order to be able to compete globally, they need size. Since successive governments in the past have not taken any firm direction, nor have they outlined any, there is a widely held belief that this issue needs to be resolved once and for all.

Should this issue be opened in a serious way, cross-pillar mergers may pose the greatest threat to our industry – even a greater threat than revisions to the Bank Act. The argument will be made that if insurers are allowed to retail banking products, then why should banks not be allowed to retail insurance products?

With a current minority government, anything can happen; any party can form the next government within a short timeframe. This is why we need to continue raising the issue with our legislators even more actively. Now is the best time to do so. The period leading up to an election campaign provides one of the greatest opportunities to get involved.

Irrespective of the party or candidate you support, get involved. Let your MP or candidate know that you appreciate the effort they are doing in serving the public. This is an excellent opportunity to raise some of the issues affecting your profession, and underline the importance that you as a small business owner, an employer and a constituent play in your community.

If you don’t know how to get involved, call your provincial association: they will be able to help you. Brokers shouldn’t assume they will have the politicians’ support during the times when the industry needs something. Most politicians are there in the true sense of the phrase “public service.” They work for us, and not the other way around. So it is vitally important to have an ongoing relationship with them. Right now is the time either to re-connect or to begin a relationship with someone new with whom you may not have had any dealings with in the past.