B.C. and Alta credit union battle could impact national Bank Act war

If B.C. and Alberta credit unions are allowed to own or operate Alberta insurance brokerages as a result of harmonizing legislation between Alberta and B.C., that could have a huge impact on the national Bank Act issue.
And yet, the Alberta insurance brokers’ lobby to prevent this from happening rates only a ‘C,’ says an industry representative negotiating with the Alberta government on behalf of the Insurance Brokers Association of Alberta (IBAA).
The province’s Trade, Investment and Labour Mobility Agreement (TILMA) with B.C. officially took effect on April 1, 2009. The deal outlines a model for interprovincial trade liberalization.
Alberta’s passage of TILMA has thus far left out the financial services portion of the agreement until a future date in order to work out the details.
Alberta’s law currently does not allow credit unions to own or operate insurance brokerages, whereas B.C.’s law does. The IBAA is concerned that TILMA will allow both B.C. and Alberta credit unions to own and operate Alberta brokerages.
Harold Baker, the immediate past CEO of IBAA who is part of a team negotiating with politicians over TILMA, says that if brokers are apathetic about contacting their MPs, “my biggest fear right now is that somebody in government will instruct Alberta Finance to go back and say: ‘Find a solution that we can have a credit union in this [insurance] business and still keep the brokers alive.’”
Speaking at the annual general meeting of the IBAA, Baker says the lobbying efforts of brokers on the TILMA issue “haven’t been as effective as I’d like us to be.” When asked to rate the lobbying effort so far, he gave it ‘C’ grade.
He added that, without more broker volunteers to talk to MLAs about the importance of the TILMA issue to the profession, brokers in the province stood no better than a 50/50 chance of resolving the issue in their favour.
The issue is important for brokers nationally, said Randy Dawson, a partner of Spotlight Strategies, a public relations firm. He said if credit unions succeed on the TILMA issue, banks would go to the federal government and ask for the same powers. Effectively, the banks would argue that they would need such powers to compete with the credit unions, Dawson said.
“If we lose the TILMA battle, we may lose the [Bank Act] war,” Dawson said. “Don’t think we can relax provincially or federally.”