Federal issues still persist in wake of Bank Act review

Livestock insurance, the increase in off-shoring of financial services and fiscal imbalance between the levels of government are all issues that still need to be addressed by the federal government in the wake of the Bank Act review, said Normand Lafreniere, president of the Canadian Association of Mutual Insurance Companies (CAMIC).
Speaking at CAMIC’s 2008 mid-term meeting at the Sheraton Centre in Toronto, Lafreniere said that while the federal government is moving on all three issues, the association still needs to be proactive in pushing for satisfactory solutions.
While the federal Department of Agriculture has a crop insurance program, government officials held a meeting in January to discuss expanding the program to livestock, Lafreniere said.
CAMIC participated in the meeting, he continued. “The feds do want a solution, and they want private sector involvement in doing so. While this is far from closed, the government is already looking at it, and it is a good sign.”
The industry has seen an increase in the number of financial services companies who are moving offshore, Lafreniere said. “Again, the federal government has acknowledged this and are already working to ensure that these are genuine companies and CAMIC supports that because it wants to have a level playing field in the market,” he added.
And the third issue is the fiscal imbalance between governments. “Too much money is going to the federal government and not enough is going to the provincial or municipal governments,” he argued.
If municipal roads and sewage systems are not maintained, chances are that mutual insurers would see an increase in claims, Lafreniere said. In worst-case scenarios, certain areas’ decaying infrastructure would pose too big of a risk to allow insurers to underwrite in the area, he added.
“The federal government is transferring more money to municipalities, but in the long-term we would like to see municipal governments collect money directly from the tax payers, not wait for transfers from the federal government,” Lafreniere said.
“The feds are on the right track by cutting taxes and transferring more money, but we want them to go further.”